Correlation Between Eventide Healthcare and Aig Government
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Eventide Healthcare and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Aig Government.
Diversification Opportunities for Eventide Healthcare and Aig Government
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eventide and Aig is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Aig Government go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Aig Government
Assuming the 90 days horizon Eventide Healthcare Life is expected to under-perform the Aig Government. In addition to that, Eventide Healthcare is 12.11 times more volatile than Aig Government Money. It trades about -0.07 of its total potential returns per unit of risk. Aig Government Money is currently generating about 0.0 per unit of volatility. If you would invest 1,009 in Aig Government Money on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Aig Government Money or generate 0.0% 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. Aig Government Money
Performance |
| Timeline |
| Eventide Healthcare Life |
| Aig Government Money |
Eventide Healthcare and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Aig Government
The main advantage of trading using opposite Eventide Healthcare and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.The idea behind Eventide Healthcare Life and Aig Government Money pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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