Correlation Between Davis Financial and Evaluator Tactically

Can any of the company-specific risk be diversified away by investing in both Davis Financial and Evaluator Tactically 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 Davis Financial and Evaluator Tactically into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Davis Financial Fund and Evaluator Tactically Managed, you can compare the effects of market volatilities on Davis Financial and Evaluator Tactically 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 Davis Financial with a short position of Evaluator Tactically. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and Evaluator Tactically.

Diversification Opportunities for Davis Financial and Evaluator Tactically

0.92

Correlation Coefficient

Davis Financial  Evaluator Tactically

Almost no diversification

The 3 months correlation between Davis and Evaluator is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and Evaluator Tactically Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaluator Tactically and Davis Financial 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 Davis Financial Fund are associated (or correlated) with Evaluator Tactically. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaluator Tactically has no effect on the direction of Davis Financial i.e., Davis Financial and Evaluator Tactically go up and down completely randomly.

Pair Corralation between Davis Financial and Evaluator Tactically

Assuming the 90 days horizon Davis Financial is expected to generate 1.38 times less return on investment than Evaluator Tactically. In addition to that, Davis Financial is 2.2 times more volatile than Evaluator Tactically Managed. It trades about 0.07 of its total potential returns per unit of risk. Evaluator Tactically Managed is currently generating about 0.22 per unit of volatility. If you would invest  1,099  in Evaluator Tactically Managed on July 4, 2025 and sell it today you would earn a total of  52.00  from holding Evaluator Tactically Managed or generate 4.73% return on investment over 90 days.

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

Davis Financial Fund  vs.  Evaluator Tactically Managed

Davis Financial

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Davis Financial Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Davis Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Evaluator Tactically

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evaluator Tactically Managed are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Evaluator Tactically is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Davis Financial and Evaluator Tactically

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

The idea behind Davis Financial Fund and Evaluator Tactically Managed 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..