Correlation Between Catalyst Enhanced and Needham Aggressive

Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced and Needham Aggressive 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 Catalyst Enhanced and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Enhanced Income and Needham Aggressive Growth, you can compare the effects of market volatilities on Catalyst Enhanced and Needham Aggressive 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 Catalyst Enhanced with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and Needham Aggressive.

Diversification Opportunities for Catalyst Enhanced and Needham Aggressive

-0.05

Correlation Coefficient

Catalyst Enhanced  Needham Aggressive

Good diversification

The 3 months correlation between Catalyst and Needham is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth and Catalyst Enhanced 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 Catalyst Enhanced Income are associated (or correlated) with Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Catalyst Enhanced i.e., Catalyst Enhanced and Needham Aggressive go up and down completely randomly.

Pair Corralation between Catalyst Enhanced and Needham Aggressive

Assuming the 90 days horizon Catalyst Enhanced Income is expected to under-perform the Needham Aggressive. But the mutual fund apears to be less risky and, when comparing its historical volatility, Catalyst Enhanced Income is 2.87 times less risky than Needham Aggressive. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Needham Aggressive Growth is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5,038  in Needham Aggressive Growth on May 16, 2025 and sell it today you would earn a total of  697.00  from holding Needham Aggressive Growth or generate 13.83% return on investment over 90 days.

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

Catalyst Enhanced Income  vs.  Needham Aggressive Growth

Catalyst Enhanced Income

Risk-Adjusted Performance

Weakest

Over the last 90 days Catalyst Enhanced Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catalyst Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Needham Aggressive Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 14 (%) 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.

Pair Trading with Catalyst Enhanced and Needham Aggressive

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

The idea behind Catalyst Enhanced Income and Needham Aggressive Growth 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.