Correlation Between Eventide Healthcare and Valic Company
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Eventide Healthcare and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Valic Company.
Diversification Opportunities for Eventide Healthcare and Valic Company
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eventide and Valic is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Valic Company go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Valic Company
Assuming the 90 days horizon Eventide Healthcare Life is expected to under-perform the Valic Company. In addition to that, Eventide Healthcare is 7.35 times more volatile than Valic Company I. It trades about -0.18 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.13 per unit of volatility. If you would invest 734.00 in Valic Company I on November 28, 2024 and sell it today you would earn a total of 3.00 from holding Valic Company I or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Valic Company I
Performance |
| Timeline |
| Eventide Healthcare Life |
| Valic Company I |
Eventide Healthcare and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Valic Company
The main advantage of trading using opposite Eventide Healthcare and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Eventide Healthcare vs. Tekla Healthcare Investors | Eventide Healthcare vs. Baillie Gifford Health | Eventide Healthcare vs. T Rowe Price | Eventide Healthcare vs. Blackrock Health Sciences |
| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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