Correlation Between Live Oak and Needham Growth
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Needham Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Needham Growth, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Needham Growth.
Diversification Opportunities for Live Oak and Needham Growth
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Needham is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Needham Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Growth and Live Oak 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 Live Oak Health 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 Live Oak i.e., Live Oak and Needham Growth go up and down completely randomly.
Pair Corralation between Live Oak and Needham Growth
Assuming the 90 days horizon Live Oak is expected to generate 15.72 times less return on investment than Needham Growth. But when comparing it to its historical volatility, Live Oak Health is 1.46 times less risky than Needham Growth. It trades about 0.02 of its potential returns per unit of risk. Needham Growth is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,190 in Needham Growth on May 1, 2025 and sell it today you would earn a total of 1,237 from holding Needham Growth or generate 23.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Needham Growth
Performance |
| Timeline |
| Live Oak Health |
| Needham Growth |
Live Oak and Needham Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Needham Growth
The main advantage of trading using opposite Live Oak and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Needham Growth vs. Equalize Community Development | Needham Growth vs. Bbh Intermediate Municipal | Needham Growth vs. Prudential California Muni | Needham Growth vs. Gurtin California Muni |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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