Correlation Between Needham Small and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Needham Small and Goldman Sachs 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 Small and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Small Cap and Goldman Sachs Clean, you can compare the effects of market volatilities on Needham Small and Goldman Sachs 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 Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Goldman Sachs.
Diversification Opportunities for Needham Small and Goldman Sachs
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Needham and Goldman is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Needham Small 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 Small Cap are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Clean has no effect on the direction of Needham Small i.e., Needham Small and Goldman Sachs go up and down completely randomly.
Pair Corralation between Needham Small and Goldman Sachs
Assuming the 90 days horizon Needham Small Cap is expected to generate 1.67 times more return on investment than Goldman Sachs. However, Needham Small is 1.67 times more volatile than Goldman Sachs Clean. It trades about -0.09 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.5 per unit of risk. If you would invest 1,911 in Needham Small Cap on September 25, 2024 and sell it today you would lose (54.00) from holding Needham Small Cap or give up 2.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Needham Small Cap vs. Goldman Sachs Clean
Performance |
Timeline |
Needham Small Cap |
Goldman Sachs Clean |
Needham Small and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Needham Small and Goldman Sachs
The main advantage of trading using opposite Needham Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.Needham Small vs. Needham Aggressive Growth | Needham Small vs. Needham Growth Fund | Needham Small vs. Baron Opportunity Fund | Needham Small vs. Jacob Micro Cap |
Goldman Sachs vs. Lebenthal Lisanti Small | Goldman Sachs vs. Needham Small Cap | Goldman Sachs vs. Guidemark Smallmid Cap | Goldman Sachs vs. Sp Smallcap 600 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |