Correlation Between Needham Aggressive and Copeland Risk

Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Copeland Risk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Needham Aggressive and Copeland Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Needham Aggressive Growth and Copeland Risk Managed, you can compare the effects of market volatilities on Needham Aggressive and Copeland Risk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Needham Aggressive with a short position of Copeland Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Copeland Risk.

Diversification Opportunities for Needham Aggressive and Copeland Risk

-0.12

Correlation Coefficient

Needham Aggressive  Copeland Risk

Good diversification

The 3 months correlation between Needham and Copeland is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Copeland Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copeland Risk Managed and Needham Aggressive is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Needham Aggressive Growth are associated (or correlated) with Copeland Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copeland Risk Managed has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Copeland Risk go up and down completely randomly.

Pair Corralation between Needham Aggressive and Copeland Risk

Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.34 times more return on investment than Copeland Risk. However, Needham Aggressive is 1.34 times more volatile than Copeland Risk Managed. It trades about -0.2 of its potential returns per unit of risk. Copeland Risk Managed is currently generating about -0.31 per unit of risk. If you would invest  5,180  in Needham Aggressive Growth on October 12, 2024 and sell it today you would lose (273.00) from holding Needham Aggressive Growth or give up 5.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Needham Aggressive Growth  vs.  Copeland Risk Managed

Needham Aggressive Growth

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Needham Aggressive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Needham Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Needham Aggressive and Copeland Risk

The main advantage of trading using opposite Needham Aggressive and Copeland Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Copeland Risk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Copeland Risk will offset losses from the drop in Copeland Risk's long position.

The idea behind Needham Aggressive Growth and Copeland Risk Managed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.