Correlation Between Needham Aggressive and Campbell Systematic

Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Campbell Systematic 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 Campbell Systematic 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 Campbell Systematic Macro, you can compare the effects of market volatilities on Needham Aggressive and Campbell Systematic 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 Campbell Systematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Campbell Systematic.

Diversification Opportunities for Needham Aggressive and Campbell Systematic

0.41

Correlation Coefficient

Needham Aggressive  Campbell Systematic

Very weak diversification

The 3 months correlation between Needham and Campbell is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Campbell Systematic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Systematic Macro 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 Campbell Systematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campbell Systematic Macro has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Campbell Systematic go up and down completely randomly.

Pair Corralation between Needham Aggressive and Campbell Systematic

Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.25 times more return on investment than Campbell Systematic. However, Needham Aggressive is 2.25 times more volatile than Campbell Systematic Macro. It trades about 0.07 of its potential returns per unit of risk. Campbell Systematic Macro is currently generating about 0.04 per unit of risk. If you would invest  3,453  in Needham Aggressive Growth on October 23, 2024 and sell it today you would earn a total of  1,682  from holding Needham Aggressive Growth or generate 48.71% return on investment over 90 days.

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

Needham Aggressive Growth  vs.  Campbell Systematic Macro

Needham Aggressive Growth

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Needham Aggressive may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Campbell Systematic Macro

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Campbell Systematic Macro are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Campbell Systematic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Needham Aggressive and Campbell Systematic

The main advantage of trading using opposite Needham Aggressive and Campbell Systematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Campbell Systematic 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 Campbell Systematic will offset losses from the drop in Campbell Systematic's long position.

The idea behind Needham Aggressive Growth and Campbell Systematic Macro 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.