Correlation Between Needham Aggressive and Ab Fixed

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

Diversification Opportunities for Needham Aggressive and Ab Fixed

0.0

Correlation Coefficient

Needham Aggressive  Ab Fixed

Pay attention - limited upside

The 3 months correlation between Needham and MYMXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Ab Fixed Income Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Fixed Income 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 Ab Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Fixed Income has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Ab Fixed go up and down completely randomly.

Pair Corralation between Needham Aggressive and Ab Fixed

Assuming the 90 days horizon Needham Aggressive is expected to generate 6.95 times less return on investment than Ab Fixed. But when comparing it to its historical volatility, Needham Aggressive Growth is 14.27 times less risky than Ab Fixed. It trades about 0.07 of its potential returns per unit of risk. Ab Fixed Income Shares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Ab Fixed Income Shares on October 10, 2024 and sell it today you would earn a total of  9.00  from holding Ab Fixed Income Shares or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.61%
Values	Daily Returns

Needham Aggressive Growth  vs.  Ab Fixed Income Shares

Needham Aggressive Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. 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.

Ab Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Fixed Income Shares has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Fixed 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 Ab Fixed

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

The idea behind Needham Aggressive Growth and Ab Fixed Income Shares 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.