Correlation Between Needham Aggressive and Oppenheimer Cap

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

Diversification Opportunities for Needham Aggressive and Oppenheimer Cap

0.71

Correlation Coefficient

Needham Aggressive  Oppenheimer Cap

Poor diversification

The 3 months correlation between Needham and Oppenheimer is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Oppenheimer Cap Apprec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Cap Apprec 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 Oppenheimer Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Cap Apprec has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Oppenheimer Cap go up and down completely randomly.

Pair Corralation between Needham Aggressive and Oppenheimer Cap

Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Oppenheimer Cap. In addition to that, Needham Aggressive is 1.02 times more volatile than Oppenheimer Cap Apprec. It trades about -0.08 of its total potential returns per unit of risk. Oppenheimer Cap Apprec is currently generating about -0.06 per unit of volatility. If you would invest  7,556  in Oppenheimer Cap Apprec on September 22, 2024 and sell it today you would lose (136.00) from holding Oppenheimer Cap Apprec or give up 1.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Needham Aggressive Growth  vs.  Oppenheimer Cap Apprec

Needham Aggressive Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Needham Aggressive Growth has generated negative risk-adjusted returns adding no value to fund investors. 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.

Oppenheimer Cap Apprec

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Cap Apprec are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Cap 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 Oppenheimer Cap

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

The idea behind Needham Aggressive Growth and Oppenheimer Cap Apprec 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.