Correlation Between Needham Aggressive and First Investors

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

Diversification Opportunities for Needham Aggressive and First Investors

0.91

Correlation Coefficient

Needham Aggressive  First Investors

Almost no diversification

The 3 months correlation between Needham and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Select has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and First Investors go up and down completely randomly.

Pair Corralation between Needham Aggressive and First Investors

Assuming the 90 days horizon Needham Aggressive is expected to generate 1.77 times less return on investment than First Investors. In addition to that, Needham Aggressive is 1.42 times more volatile than First Investors Select. It trades about 0.03 of its total potential returns per unit of risk. First Investors Select is currently generating about 0.07 per unit of volatility. If you would invest  1,149  in First Investors Select on June 12, 2025 and sell it today you would earn a total of  326.00  from holding First Investors Select or generate 28.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Needham Aggressive Growth  vs.  First Investors Select

Needham Aggressive Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Needham Aggressive may actually be approaching a critical reversion point that can send shares even higher in October 2025.

First Investors Select

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Select are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, First Investors may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Needham Aggressive and First Investors

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

The idea behind Needham Aggressive Growth and First Investors Select 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.