Correlation Between Needham Small and Needham Growth
Can any of the company-specific risk be diversified away by investing in both Needham Small and Needham Growth 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 Needham Growth 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 Needham Growth, you can compare the effects of market volatilities on Needham Small and Needham Growth 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 Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Needham Growth.
Diversification Opportunities for Needham Small and Needham Growth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Needham and Needham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Needham Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Growth 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 Needham Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Growth has no effect on the direction of Needham Small i.e., Needham Small and Needham Growth go up and down completely randomly.
Pair Corralation between Needham Small and Needham Growth
If you would invest 1,768 in Needham Small Cap on December 7, 2024 and sell it today you would lose (14.00) from holding Needham Small Cap or give up 0.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Needham Small Cap vs. Needham Growth
Performance |
Timeline |
Needham Small Cap |
Needham Growth |
Needham Small and Needham Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Needham Small and Needham Growth
The main advantage of trading using opposite Needham Small and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Needham Growth 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 Needham Growth will offset losses from the drop in Needham Growth's long position.Needham Small vs. Needham Small Cap | Needham Small vs. Needham Aggressive Growth | Needham Small vs. Needham Aggressive Growth | Needham Small vs. Ultramid Cap Profund Ultramid Cap |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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