Correlation Between City National and Needham Growth
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Needham Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Needham Growth, you can compare the effects of market volatilities on City National 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 City National with a short position of Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Needham Growth.
Diversification Opportunities for City National and Needham Growth
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Needham is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Needham Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Growth and City National 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 City National Rochdale 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 City National i.e., City National and Needham Growth go up and down completely randomly.
Pair Corralation between City National and Needham Growth
Assuming the 90 days horizon City National Rochdale is expected to generate 0.06 times more return on investment than Needham Growth. However, City National Rochdale is 17.33 times less risky than Needham Growth. It trades about 0.03 of its potential returns per unit of risk. Needham Growth is currently generating about -0.12 per unit of risk. If you would invest 1,976 in City National Rochdale on September 24, 2024 and sell it today you would earn a total of 1.00 from holding City National Rochdale or generate 0.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
City National Rochdale vs. Needham Growth
Performance |
Timeline |
City National Rochdale |
Needham Growth |
City National and Needham Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with City National and Needham Growth
The main advantage of trading using opposite City National and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.City National vs. Jp Morgan Smartretirement | City National vs. Fidelity Managed Retirement | City National vs. Deutsche Multi Asset Moderate | City National vs. Saat Moderate Strategy |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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