Correlation Between Edgewood Growth and Eventide Gilead
Can any of the company-specific risk be diversified away by investing in both Edgewood Growth and Eventide Gilead 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 Edgewood Growth and Eventide Gilead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewood Growth Fund and Eventide Gilead Fund, you can compare the effects of market volatilities on Edgewood Growth and Eventide Gilead 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 Edgewood Growth with a short position of Eventide Gilead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewood Growth and Eventide Gilead.
Diversification Opportunities for Edgewood Growth and Eventide Gilead
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edgewood and Eventide is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Edgewood Growth Fund and Eventide Gilead Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Gilead and Edgewood Growth 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 Edgewood Growth Fund are associated (or correlated) with Eventide Gilead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Gilead has no effect on the direction of Edgewood Growth i.e., Edgewood Growth and Eventide Gilead go up and down completely randomly.
Pair Corralation between Edgewood Growth and Eventide Gilead
Assuming the 90 days horizon Edgewood Growth Fund is expected to generate 1.15 times more return on investment than Eventide Gilead. However, Edgewood Growth is 1.15 times more volatile than Eventide Gilead Fund. It trades about 0.04 of its potential returns per unit of risk. Eventide Gilead Fund is currently generating about 0.03 per unit of risk. If you would invest 3,139 in Edgewood Growth Fund on November 27, 2024 and sell it today you would earn a total of 894.00 from holding Edgewood Growth Fund or generate 28.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewood Growth Fund vs. Eventide Gilead Fund
Performance |
| Timeline |
| Edgewood Growth |
| Eventide Gilead |
Edgewood Growth and Eventide Gilead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewood Growth and Eventide Gilead
The main advantage of trading using opposite Edgewood Growth and Eventide Gilead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewood Growth position performs unexpectedly, Eventide Gilead 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 Gilead will offset losses from the drop in Eventide Gilead's long position.| Edgewood Growth vs. Edgewood Growth Fund | Edgewood Growth vs. Polen Growth Fund | Edgewood Growth vs. Doubleline Shiller Enhanced | Edgewood Growth vs. Parnassus Endeavor Fund |
| Eventide Gilead vs. Ep Emerging Markets | Eventide Gilead vs. Champlain Small | Eventide Gilead vs. Ashmore Emerging Markets | Eventide Gilead vs. Small Pany Growth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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