Correlation Between Needham Small and Evaluator Tactically

Can any of the company-specific risk be diversified away by investing in both Needham Small 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 Needham Small and Evaluator Tactically 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 Evaluator Tactically Managed, you can compare the effects of market volatilities on Needham Small 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 Needham Small with a short position of Evaluator Tactically. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Evaluator Tactically.

Diversification Opportunities for Needham Small and Evaluator Tactically

0.72

Correlation Coefficient

Needham Small  Evaluator Tactically

Poor diversification

The 3 months correlation between Needham and Evaluator is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Evaluator Tactically Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaluator Tactically 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 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 Needham Small i.e., Needham Small and Evaluator Tactically go up and down completely randomly.

Pair Corralation between Needham Small and Evaluator Tactically

Assuming the 90 days horizon Needham Small Cap is expected to generate 4.57 times more return on investment than Evaluator Tactically. However, Needham Small is 4.57 times more volatile than Evaluator Tactically Managed. It trades about 0.15 of its potential returns per unit of risk. Evaluator Tactically Managed is currently generating about 0.29 per unit of risk. If you would invest  1,605  in Needham Small Cap on May 21, 2025 and sell it today you would earn a total of  234.00  from holding Needham Small Cap or generate 14.58% return on investment over 90 days.

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

Needham Small Cap  vs.  Evaluator Tactically Managed

Needham Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Needham Small showed solid returns over the last few months and may actually be approaching a breakup point.

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 22 (%) 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 Needham Small and Evaluator Tactically

The main advantage of trading using opposite Needham Small and Evaluator Tactically positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small 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 Needham Small Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.