Correlation Between Eventide Healthcare and Jacob Small
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Jacob Small 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 Jacob Small 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 Jacob Small Cap, you can compare the effects of market volatilities on Eventide Healthcare and Jacob Small 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 Jacob Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Jacob Small.
Diversification Opportunities for Eventide Healthcare and Jacob Small
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eventide and Jacob is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Jacob Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Small Cap 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 Jacob Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Small Cap has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Jacob Small go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Jacob Small
Assuming the 90 days horizon Eventide Healthcare Life is expected to under-perform the Jacob Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eventide Healthcare Life is 1.17 times less risky than Jacob Small. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Jacob Small Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,197 in Jacob Small Cap on September 12, 2024 and sell it today you would earn a total of 177.00 from holding Jacob Small Cap or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Jacob Small Cap
Performance |
| Timeline |
| Eventide Healthcare Life |
| Jacob Small Cap |
Eventide Healthcare and Jacob Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Jacob Small
The main advantage of trading using opposite Eventide Healthcare and Jacob Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Jacob Small 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 Jacob Small will offset losses from the drop in Jacob Small's long position.| Eventide Healthcare vs. Angel Oak Financial | Eventide Healthcare vs. Royce Global Financial | Eventide Healthcare vs. 1919 Financial Services | Eventide Healthcare vs. John Hancock Financial |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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