Correlation Between Needham Aggressive and Mairs Power
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Mairs Power 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 Mairs Power 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 Mairs Power Growth, you can compare the effects of market volatilities on Needham Aggressive and Mairs Power 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 Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Mairs Power.
Diversification Opportunities for Needham Aggressive and Mairs Power
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Mairs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Mairs Power Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Growth 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 Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Mairs Power go up and down completely randomly.
Pair Corralation between Needham Aggressive and Mairs Power
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.17 times more return on investment than Mairs Power. However, Needham Aggressive is 1.17 times more volatile than Mairs Power Growth. It trades about -0.08 of its potential returns per unit of risk. Mairs Power Growth is currently generating about -0.28 per unit of risk. If you would invest 5,151 in Needham Aggressive Growth on October 10, 2024 and sell it today you would lose (117.00) from holding Needham Aggressive Growth or give up 2.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Needham Aggressive Growth vs. Mairs Power Growth
Performance |
Timeline |
Needham Aggressive Growth |
Mairs Power Growth |
Needham Aggressive and Mairs Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Needham Aggressive and Mairs Power
The main advantage of trading using opposite Needham Aggressive and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power's long position.Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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