Correlation Between Needham Aggressive and Utilities Ultrasector

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

Diversification Opportunities for Needham Aggressive and Utilities Ultrasector

0.79

Correlation Coefficient

Needham Aggressive  Utilities Ultrasector

Poor diversification

The 3 months correlation between Needham and Utilities is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Utilities Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Ultrasector 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 Utilities Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Ultrasector has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Utilities Ultrasector go up and down completely randomly.

Pair Corralation between Needham Aggressive and Utilities Ultrasector

Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 0.92 times more return on investment than Utilities Ultrasector. However, Needham Aggressive Growth is 1.09 times less risky than Utilities Ultrasector. It trades about 0.35 of its potential returns per unit of risk. Utilities Ultrasector Profund is currently generating about 0.14 per unit of risk. If you would invest  4,318  in Needham Aggressive Growth on April 30, 2025 and sell it today you would earn a total of  1,292  from holding Needham Aggressive Growth or generate 29.92% return on investment over 90 days.

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

Needham Aggressive Growth  vs.  Utilities Ultrasector Profund

Needham Aggressive Growth

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Needham Aggressive showed solid returns over the last few months and may actually be approaching a breakup point.

Utilities Ultrasector

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Ultrasector Profund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Utilities Ultrasector may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Needham Aggressive and Utilities Ultrasector

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

The idea behind Needham Aggressive Growth and Utilities Ultrasector Profund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.