Correlation Between Eventide Healthcare and Focused International
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Focused International 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 Eventide Healthcare and Focused International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eventide Healthcare Life and Focused International Growth, you can compare the effects of market volatilities on Eventide Healthcare and Focused International 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 Eventide Healthcare with a short position of Focused International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Focused International.
Diversification Opportunities for Eventide Healthcare and Focused International
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eventide and Focused is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Focused International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focused International and Eventide Healthcare 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 Eventide Healthcare Life are associated (or correlated) with Focused International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focused International has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Focused International go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Focused International
Assuming the 90 days horizon Eventide Healthcare Life is expected to under-perform the Focused International. In addition to that, Eventide Healthcare is 2.42 times more volatile than Focused International Growth. It trades about -0.05 of its total potential returns per unit of risk. Focused International Growth is currently generating about 0.14 per unit of volatility. If you would invest 1,709 in Focused International Growth on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Focused International Growth or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Focused International Growth
Performance |
| Timeline |
| Eventide Healthcare Life |
| Focused International |
Eventide Healthcare and Focused International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Focused International
The main advantage of trading using opposite Eventide Healthcare and Focused International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Focused International 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 Focused International will offset losses from the drop in Focused International's long position.| Eventide Healthcare vs. Falcon Focus Scv | Eventide Healthcare vs. Qs Large Cap | Eventide Healthcare vs. Materials Portfolio Fidelity | Eventide Healthcare vs. Iaadx |
| Focused International vs. The Gabelli Healthcare | Focused International vs. Lord Abbett Health | Focused International vs. Highland Longshort Healthcare | Focused International vs. Eventide Healthcare Life |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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