Correlation Between Eventide Gilead and Matthew 25

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Can any of the company-specific risk be diversified away by investing in both Eventide Gilead and Matthew 25 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 Matthew 25 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 Matthew 25 Fund, you can compare the effects of market volatilities on Eventide Gilead and Matthew 25 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 Matthew 25. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Gilead and Matthew 25.

Diversification Opportunities for Eventide Gilead and Matthew 25

EventideMatthewDiversified AwayEventideMatthewDiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Eventide and Matthew is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Gilead Fund and Matthew 25 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthew 25 Fund 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 Matthew 25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthew 25 Fund has no effect on the direction of Eventide Gilead i.e., Eventide Gilead and Matthew 25 go up and down completely randomly.

Pair Corralation between Eventide Gilead and Matthew 25

Assuming the 90 days horizon Eventide Gilead is expected to generate 1.89 times less return on investment than Matthew 25. But when comparing it to its historical volatility, Eventide Gilead Fund is 1.08 times less risky than Matthew 25. It trades about 0.03 of its potential returns per unit of risk. Matthew 25 Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,486  in Matthew 25 Fund on November 27, 2024 and sell it today you would earn a total of  959.00  from holding Matthew 25 Fund or generate 38.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Eventide Gilead Fund  vs.  Matthew 25 Fund

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15ETGLX MXXVX
       Timeline  
Eventide Gilead 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Eventide Gilead Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Eventide Gilead is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5051525354
Matthew 25 Fund 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Matthew 25 Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb343536373839

Eventide Gilead and Matthew 25 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.85-2.89-1.92-0.950.01640.981.972.953.93 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15ETGLX MXXVX
       Returns  

Pair Trading with Eventide Gilead and Matthew 25

The main advantage of trading using opposite Eventide Gilead and Matthew 25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Gilead position performs unexpectedly, Matthew 25 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 Matthew 25 will offset losses from the drop in Matthew 25's long position.
The idea behind Eventide Gilead Fund and Matthew 25 Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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