Correlation Between Eventide Healthcare and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Templeton Growth 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 Templeton Growth 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 Templeton Growth Fund, you can compare the effects of market volatilities on Eventide Healthcare and Templeton Growth 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Templeton Growth.
Diversification Opportunities for Eventide Healthcare and Templeton Growth
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eventide and Templeton is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Templeton Growth go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Templeton Growth
Assuming the 90 days horizon Eventide Healthcare is expected to generate 3.68 times less return on investment than Templeton Growth. In addition to that, Eventide Healthcare is 2.02 times more volatile than Templeton Growth Fund. It trades about 0.01 of its total potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.06 per unit of volatility. If you would invest 2,255 in Templeton Growth Fund on October 27, 2024 and sell it today you would earn a total of 496.00 from holding Templeton Growth Fund or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Templeton Growth Fund
Performance |
| Timeline |
| Eventide Healthcare Life |
| Templeton Growth |
Eventide Healthcare and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Templeton Growth
The main advantage of trading using opposite Eventide Healthcare and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Eventide Healthcare vs. Gamco Global Gold | Eventide Healthcare vs. Wells Fargo Advantage | Eventide Healthcare vs. Vy Goldman Sachs | Eventide Healthcare vs. Global Gold Fund |
| Templeton Growth vs. Short Real Estate | Templeton Growth vs. Fidelity Real Estate | Templeton Growth vs. Forum Real Estate | Templeton Growth vs. Nexpoint Real Estate |
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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