Correlation Between Eventide Healthcare and First Eagle
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and First Eagle 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 First Eagle 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 First Eagle Small, you can compare the effects of market volatilities on Eventide Healthcare and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and First Eagle.
Diversification Opportunities for Eventide Healthcare and First Eagle
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eventide and First is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and First Eagle Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Small 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Small has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and First Eagle go up and down completely randomly.
Pair Corralation between Eventide Healthcare and First Eagle
Assuming the 90 days horizon Eventide Healthcare Life is expected to under-perform the First Eagle. In addition to that, Eventide Healthcare is 1.18 times more volatile than First Eagle Small. It trades about -0.02 of its total potential returns per unit of risk. First Eagle Small is currently generating about 0.06 per unit of volatility. If you would invest 1,078 in First Eagle Small on September 13, 2024 and sell it today you would earn a total of 34.00 from holding First Eagle Small or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. First Eagle Small
Performance |
| Timeline |
| Eventide Healthcare Life |
| First Eagle Small |
Eventide Healthcare and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and First Eagle
The main advantage of trading using opposite Eventide Healthcare and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle'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 |
| First Eagle vs. Multisector Bond Sma | First Eagle vs. Doubleline Yield Opportunities | First Eagle vs. Versatile Bond Portfolio | First Eagle vs. Alliancebernstein National Municipal |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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