Correlation Between Eventide Multi-asset and Eventide Large
Can any of the company-specific risk be diversified away by investing in both Eventide Multi-asset and Eventide Large 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 Multi-asset and Eventide Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eventide Multi Asset Income and Eventide Large Cap, you can compare the effects of market volatilities on Eventide Multi-asset and Eventide Large 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 Multi-asset with a short position of Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Multi-asset and Eventide Large.
Diversification Opportunities for Eventide Multi-asset and Eventide Large
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EVENTIDE and Eventide is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Multi Asset Income and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap and Eventide Multi-asset 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 Multi Asset Income are associated (or correlated) with Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Eventide Multi-asset i.e., Eventide Multi-asset and Eventide Large go up and down completely randomly.
Pair Corralation between Eventide Multi-asset and Eventide Large
Assuming the 90 days horizon Eventide Multi-asset is expected to generate 1.17 times less return on investment than Eventide Large. But when comparing it to its historical volatility, Eventide Multi Asset Income is 1.51 times less risky than Eventide Large. It trades about 0.26 of its potential returns per unit of risk. Eventide Large Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,451 in Eventide Large Cap on August 29, 2024 and sell it today you would earn a total of 53.00 from holding Eventide Large Cap or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Multi Asset Income vs. Eventide Large Cap
Performance |
| Timeline |
| Eventide Multi Asset |
| Eventide Large Cap |
Eventide Multi-asset and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Multi-asset and Eventide Large
The main advantage of trading using opposite Eventide Multi-asset and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Multi-asset position performs unexpectedly, Eventide Large 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 Eventide Large will offset losses from the drop in Eventide Large's long position.| Eventide Multi-asset vs. Aqr Long Short Equity | Eventide Multi-asset vs. Touchstone Ultra Short | Eventide Multi-asset vs. Astor Longshort Fund | Eventide Multi-asset vs. Quantitative Longshort Equity |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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