Correlation Between Needham Small and Westcore Municipal
Can any of the company-specific risk be diversified away by investing in both Needham Small and Westcore Municipal 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 Small and Westcore Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Small Cap and Westcore Municipal Opportunities, you can compare the effects of market volatilities on Needham Small and Westcore Municipal 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 Small with a short position of Westcore Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Westcore Municipal.
Diversification Opportunities for Needham Small and Westcore Municipal
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Westcore is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Westcore Municipal Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Municipal and Needham Small 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 Small Cap are associated (or correlated) with Westcore Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Municipal has no effect on the direction of Needham Small i.e., Needham Small and Westcore Municipal go up and down completely randomly.
Pair Corralation between Needham Small and Westcore Municipal
Assuming the 90 days horizon Needham Small Cap is expected to generate 18.57 times more return on investment than Westcore Municipal. However, Needham Small is 18.57 times more volatile than Westcore Municipal Opportunities. It trades about 0.06 of its potential returns per unit of risk. Westcore Municipal Opportunities is currently generating about 0.35 per unit of risk. If you would invest 1,836 in Needham Small Cap on August 30, 2025 and sell it today you would earn a total of 133.00 from holding Needham Small Cap or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Small Cap vs. Westcore Municipal Opportuniti
Performance |
| Timeline |
| Needham Small Cap |
| Westcore Municipal |
Needham Small and Westcore Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Westcore Municipal
The main advantage of trading using opposite Needham Small and Westcore Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Westcore Municipal 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 Westcore Municipal will offset losses from the drop in Westcore Municipal's long position.| Needham Small vs. Qs Large Cap | Needham Small vs. Knights Of Umbus | Needham Small vs. Balanced Allocation Fund | Needham Small vs. Mutual Of America |
| Westcore Municipal vs. Fidelity Advisor Energy | Westcore Municipal vs. Jennison Natural Resources | Westcore Municipal vs. World Energy Fund | Westcore Municipal vs. Invesco Energy Fund |
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 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.
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