Correlation Between Eventide Healthcare and American Beacon
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and American Beacon 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 American Beacon 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 American Beacon Ssi, you can compare the effects of market volatilities on Eventide Healthcare and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and American Beacon.
Diversification Opportunities for Eventide Healthcare and American Beacon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eventide and American is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and American Beacon Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ssi 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Ssi has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and American Beacon go up and down completely randomly.
Pair Corralation between Eventide Healthcare and American Beacon
Assuming the 90 days horizon Eventide Healthcare Life is expected to generate 18.47 times more return on investment than American Beacon. However, Eventide Healthcare is 18.47 times more volatile than American Beacon Ssi. It trades about 0.18 of its potential returns per unit of risk. American Beacon Ssi is currently generating about 0.42 per unit of risk. If you would invest 3,321 in Eventide Healthcare Life on November 5, 2024 and sell it today you would earn a total of 153.00 from holding Eventide Healthcare Life or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. American Beacon Ssi
Performance |
| Timeline |
| Eventide Healthcare Life |
| American Beacon Ssi |
Eventide Healthcare and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and American Beacon
The main advantage of trading using opposite Eventide Healthcare and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Eventide Healthcare vs. Touchstone Large Cap | Eventide Healthcare vs. Americafirst Large Cap | Eventide Healthcare vs. Guidemark Large Cap | Eventide Healthcare vs. Dodge Cox Stock |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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