Correlation Between Eventide Healthcare and Eventide Multi-asset
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Eventide Multi-asset 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 Eventide Multi-asset 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 Eventide Multi Asset Income, you can compare the effects of market volatilities on Eventide Healthcare and Eventide Multi-asset 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 Eventide Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Eventide Multi-asset.
Diversification Opportunities for Eventide Healthcare and Eventide Multi-asset
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eventide and Eventide is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Eventide Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Multi Asset 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 Eventide Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Multi Asset has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Eventide Multi-asset go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Eventide Multi-asset
Assuming the 90 days horizon Eventide Healthcare is expected to generate 1.16 times less return on investment than Eventide Multi-asset. In addition to that, Eventide Healthcare is 2.8 times more volatile than Eventide Multi Asset Income. It trades about 0.05 of its total potential returns per unit of risk. Eventide Multi Asset Income is currently generating about 0.15 per unit of volatility. If you would invest 1,360 in Eventide Multi Asset Income on August 29, 2024 and sell it today you would earn a total of 143.00 from holding Eventide Multi Asset Income or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Eventide Multi Asset Income
Performance |
| Timeline |
| Eventide Healthcare Life |
| Eventide Multi Asset |
Eventide Healthcare and Eventide Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Eventide Multi-asset
The main advantage of trading using opposite Eventide Healthcare and Eventide Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Eventide Multi-asset 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 Multi-asset will offset losses from the drop in Eventide Multi-asset's long position.The idea behind Eventide Healthcare Life and Eventide Multi Asset Income 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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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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