Correlation Between Eventide Healthcare and Baron Health
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Baron Health 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 Baron Health 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 Baron Health Care, you can compare the effects of market volatilities on Eventide Healthcare and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Baron Health.
Diversification Opportunities for Eventide Healthcare and Baron Health
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eventide and Baron is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Baron Health go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Baron Health
Assuming the 90 days horizon Eventide Healthcare Life is expected to generate 1.61 times more return on investment than Baron Health. However, Eventide Healthcare is 1.61 times more volatile than Baron Health Care. It trades about 0.27 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.37 per unit of risk. If you would invest 3,272 in Eventide Healthcare Life on November 2, 2024 and sell it today you would earn a total of 230.00 from holding Eventide Healthcare Life or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Baron Health Care
Performance |
| Timeline |
| Eventide Healthcare Life |
| Baron Health Care |
Eventide Healthcare and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Baron Health
The main advantage of trading using opposite Eventide Healthcare and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Eventide Healthcare vs. Franklin Government Money | Eventide Healthcare vs. Blrc Sgy Mnp | Eventide Healthcare vs. Doubleline Total Return | Eventide Healthcare vs. California Municipal Portfolio |
| Baron Health vs. Ab Global Bond | Baron Health vs. Ms Global Fixed | Baron Health vs. Morningstar Global Income | Baron Health vs. Rbc Global Opportunities |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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