Correlation Between Eventide Healthcare and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Touchstone Sands 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 Touchstone Sands 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 Touchstone Sands Capital, you can compare the effects of market volatilities on Eventide Healthcare and Touchstone Sands 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 Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Touchstone Sands.
Diversification Opportunities for Eventide Healthcare and Touchstone Sands
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eventide and Touchstone is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital 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 Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Touchstone Sands go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Touchstone Sands
Assuming the 90 days horizon Eventide Healthcare Life is expected to generate 1.82 times more return on investment than Touchstone Sands. However, Eventide Healthcare is 1.82 times more volatile than Touchstone Sands Capital. It trades about 0.05 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.06 per unit of risk. If you would invest 2,950 in Eventide Healthcare Life on September 1, 2024 and sell it today you would earn a total of 609.00 from holding Eventide Healthcare Life or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Touchstone Sands Capital
Performance |
| Timeline |
| Eventide Healthcare Life |
| Touchstone Sands Capital |
Eventide Healthcare and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Touchstone Sands
The main advantage of trading using opposite Eventide Healthcare and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Touchstone Sands 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 Touchstone Sands will offset losses from the drop in Touchstone Sands' long position.| Eventide Healthcare vs. Large Cap Growth Profund | Eventide Healthcare vs. Dunham Large Cap | Eventide Healthcare vs. Tax Managed Large Cap | Eventide Healthcare vs. Transamerica Large Cap |
| Touchstone Sands vs. Touchstone Small Cap | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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