Correlation Between American Balanced and Eventide Multi-asset
Can any of the company-specific risk be diversified away by investing in both American Balanced and Eventide Multi-asset 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 American Balanced and Eventide Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Eventide Multi Asset Income, you can compare the effects of market volatilities on American Balanced and Eventide Multi-asset 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 American Balanced with a short position of Eventide Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Eventide Multi-asset.
Diversification Opportunities for American Balanced and Eventide Multi-asset
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Eventide is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Eventide Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Multi Asset and American Balanced 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 American Balanced Fund are associated (or correlated) with Eventide Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Multi Asset has no effect on the direction of American Balanced i.e., American Balanced and Eventide Multi-asset go up and down completely randomly.
Pair Corralation between American Balanced and Eventide Multi-asset
Assuming the 90 days horizon American Balanced is expected to generate 2.07 times less return on investment than Eventide Multi-asset. In addition to that, American Balanced is 1.01 times more volatile than Eventide Multi Asset Income. It trades about 0.12 of its total potential returns per unit of risk. Eventide Multi Asset Income is currently generating about 0.26 per unit of volatility. If you would invest 1,458 in Eventide Multi Asset Income on August 29, 2024 and sell it today you would earn a total of 45.00 from holding Eventide Multi Asset Income or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Eventide Multi Asset Income
Performance |
| Timeline |
| American Balanced |
| Eventide Multi Asset |
American Balanced and Eventide Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Eventide Multi-asset
The main advantage of trading using opposite American Balanced and Eventide Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Eventide Multi-asset 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 Eventide Multi-asset will offset losses from the drop in Eventide Multi-asset's long position.| American Balanced vs. American Balanced Fund | American Balanced vs. American Balanced Fund | American Balanced vs. HUMANA INC | American Balanced vs. Aquagold International |
| Eventide Multi-asset vs. American Balanced Fund | Eventide Multi-asset vs. American Balanced Fund | Eventide Multi-asset vs. HUMANA INC | Eventide Multi-asset vs. Aquagold International |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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