Correlation Between Eventide Gilead and Edgewood Growth
Can any of the company-specific risk be diversified away by investing in both Eventide Gilead and Edgewood Growth 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 Gilead and Edgewood Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eventide Gilead Fund and Edgewood Growth Fund, you can compare the effects of market volatilities on Eventide Gilead and Edgewood Growth 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 Gilead with a short position of Edgewood Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Gilead and Edgewood Growth.
Diversification Opportunities for Eventide Gilead and Edgewood Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EVENTIDE and Edgewood is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Gilead Fund and Edgewood Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewood Growth and Eventide Gilead 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 Gilead Fund are associated (or correlated) with Edgewood Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewood Growth has no effect on the direction of Eventide Gilead i.e., Eventide Gilead and Edgewood Growth go up and down completely randomly.
Pair Corralation between Eventide Gilead and Edgewood Growth
Assuming the 90 days horizon Eventide Gilead Fund is expected to generate 1.24 times more return on investment than Edgewood Growth. However, Eventide Gilead is 1.24 times more volatile than Edgewood Growth Fund. It trades about 0.25 of its potential returns per unit of risk. Edgewood Growth Fund is currently generating about 0.13 per unit of risk. If you would invest 5,019 in Eventide Gilead Fund on August 30, 2024 and sell it today you would earn a total of 348.00 from holding Eventide Gilead Fund or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Gilead Fund vs. Edgewood Growth Fund
Performance |
| Timeline |
| Eventide Gilead |
| Edgewood Growth |
Eventide Gilead and Edgewood Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Gilead and Edgewood Growth
The main advantage of trading using opposite Eventide Gilead and Edgewood Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Gilead position performs unexpectedly, Edgewood Growth 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 Edgewood Growth will offset losses from the drop in Edgewood Growth's long position.| Eventide Gilead vs. T Rowe Price | Eventide Gilead vs. T Rowe Price | Eventide Gilead vs. T Rowe Price | Eventide Gilead vs. T Rowe Price |
| Edgewood Growth vs. T Rowe Price | Edgewood Growth vs. T Rowe Price | Edgewood Growth vs. T Rowe Price | Edgewood Growth vs. T Rowe Price |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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