Correlation Between Eventide Healthcare and Shelton International
Can any of the company-specific risk be diversified away by investing in both Eventide Healthcare and Shelton International 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 Shelton International 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 Shelton International Select, you can compare the effects of market volatilities on Eventide Healthcare and Shelton International 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 Shelton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Healthcare and Shelton International.
Diversification Opportunities for Eventide Healthcare and Shelton International
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eventide and Shelton is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Healthcare Life and Shelton International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton International 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 Shelton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton International has no effect on the direction of Eventide Healthcare i.e., Eventide Healthcare and Shelton International go up and down completely randomly.
Pair Corralation between Eventide Healthcare and Shelton International
Assuming the 90 days horizon Eventide Healthcare Life is expected to generate 1.76 times more return on investment than Shelton International. However, Eventide Healthcare is 1.76 times more volatile than Shelton International Select. It trades about -0.06 of its potential returns per unit of risk. Shelton International Select is currently generating about -0.12 per unit of risk. If you would invest 3,649 in Eventide Healthcare Life on August 25, 2024 and sell it today you would lose (141.00) from holding Eventide Healthcare Life or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eventide Healthcare Life vs. Shelton International Select
Performance |
| Timeline |
| Eventide Healthcare Life |
| Shelton International |
Eventide Healthcare and Shelton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eventide Healthcare and Shelton International
The main advantage of trading using opposite Eventide Healthcare and Shelton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Healthcare position performs unexpectedly, Shelton International 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 Shelton International will offset losses from the drop in Shelton International's long position.| Eventide Healthcare vs. Eventide Gilead Fund | Eventide Healthcare vs. Eventide Global Dividend | Eventide Healthcare vs. Eventide Exponential Technologies | Eventide Healthcare vs. Eventide Gilead Fund |
| Shelton International vs. Baron International Growth | Shelton International vs. Shelton International Select | Shelton International vs. Davis International Fund | Shelton International vs. Blackrock Intl A |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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