Correlation Between Eventide Gilead and Emerald Growth
Can any of the company-specific risk be diversified away by investing in both Eventide Gilead and Emerald 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 Emerald 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 Emerald Growth Fund, you can compare the effects of market volatilities on Eventide Gilead and Emerald 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 Emerald Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Gilead and Emerald Growth.
Diversification Opportunities for Eventide Gilead and Emerald Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eventide and Emerald is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Gilead Fund and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald 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 Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of Eventide Gilead i.e., Eventide Gilead and Emerald Growth go up and down completely randomly.
Pair Corralation between Eventide Gilead and Emerald Growth
Assuming the 90 days horizon Eventide Gilead is expected to generate 1.21 times less return on investment than Emerald Growth. But when comparing it to its historical volatility, Eventide Gilead Fund is 1.42 times less risky than Emerald Growth. It trades about 0.21 of its potential returns per unit of risk. Emerald Growth Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,469 in Emerald Growth Fund on August 26, 2024 and sell it today you would earn a total of 171.00 from holding Emerald Growth Fund or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Gilead Fund vs. Emerald Growth Fund
Performance |
| Timeline |
| Eventide Gilead |
| Emerald Growth |
Eventide Gilead and Emerald Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Gilead and Emerald Growth
The main advantage of trading using opposite Eventide Gilead and Emerald Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Gilead position performs unexpectedly, Emerald 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 Emerald Growth will offset losses from the drop in Emerald Growth's long position.| Eventide Gilead vs. Qs Large Cap | Eventide Gilead vs. Red Oak Technology | Eventide Gilead vs. Balanced Fund Investor | Eventide Gilead vs. Materials Portfolio Fidelity |
| Emerald Growth vs. The Chesapeake Growth | Emerald Growth vs. Emerald Banking And | Emerald Growth vs. Hotchkis Wiley Large | Emerald Growth vs. Emerald Growth Fund |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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