Correlation Between Eventide Healthcare and Large-cap Growth
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Large-cap 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 Large-cap 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 Large Cap Growth Profund, you can compare the effects of market volatilities on Eventide Healthcare and Large-cap 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 Large-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Large-cap Growth.
Diversification Opportunities for Eventide Healthcare and Large-cap Growth
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between EVENTIDE and Large-cap is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap 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 Large-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Large-cap Growth go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Large-cap Growth
Assuming the 90 days horizon Eventide Healthcare is expected to generate 1.74 times less return on investment than Large-cap Growth. In addition to that, Eventide Healthcare is 1.51 times more volatile than Large Cap Growth Profund. It trades about 0.06 of its total potential returns per unit of risk. Large Cap Growth Profund is currently generating about 0.15 per unit of volatility. If you would invest 4,257 in Large Cap Growth Profund on September 3, 2024 and sell it today you would earn a total of 264.00 from holding Large Cap Growth Profund or generate 6.2% 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. Large Cap Growth Profund
Performance |
| Timeline |
| Eventide Healthcare Life |
| Large Cap Growth |
Eventide Healthcare and Large-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Large-cap Growth
The main advantage of trading using opposite Eventide Healthcare and Large-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Large-cap 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 Large-cap Growth will offset losses from the drop in Large-cap Growth's long position.| Eventide Healthcare vs. Vanguard Health Care | Eventide Healthcare vs. Vanguard Health Care | Eventide Healthcare vs. T Rowe Price | Eventide Healthcare vs. T Rowe Price |
| Large-cap Growth vs. Large Cap Value Profund | Large-cap Growth vs. Prudential Jennison International | Large-cap Growth vs. Fidelity New Markets | Large-cap Growth vs. Ohio Variable College |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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