Correlation Between Needham Aggressive and Falcon Focus
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Falcon Focus 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 Falcon Focus 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 Falcon Focus Scv, you can compare the effects of market volatilities on Needham Aggressive and Falcon Focus 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 Falcon Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Falcon Focus.
Diversification Opportunities for Needham Aggressive and Falcon Focus
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Needham and Falcon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Falcon Focus Scv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Focus Scv 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 Falcon Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Focus Scv has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Falcon Focus go up and down completely randomly.
Pair Corralation between Needham Aggressive and Falcon Focus
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.71 times more return on investment than Falcon Focus. However, Needham Aggressive is 1.71 times more volatile than Falcon Focus Scv. It trades about 0.07 of its potential returns per unit of risk. Falcon Focus Scv is currently generating about 0.09 per unit of risk. If you would invest 3,324 in Needham Aggressive Growth on October 4, 2024 and sell it today you would earn a total of 1,560 from holding Needham Aggressive Growth or generate 46.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 97.98% |
Values | Daily Returns |
Needham Aggressive Growth vs. Falcon Focus Scv
Performance |
Timeline |
Needham Aggressive Growth |
Falcon Focus Scv |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Needham Aggressive and Falcon Focus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Needham Aggressive and Falcon Focus
The main advantage of trading using opposite Needham Aggressive and Falcon Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Falcon Focus 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 Falcon Focus will offset losses from the drop in Falcon Focus' long position.Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Needham Growth Fund | Needham Aggressive vs. Oberweis Micro Cap Fund |
Falcon Focus vs. Abr Enhanced Short | Falcon Focus vs. Calvert Short Duration | Falcon Focus vs. Franklin Federal Limited Term | Falcon Focus vs. Angel Oak Ultrashort |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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