Correlation Between Federated Bond and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Federated Bond and Eventide Healthcare 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 Federated Bond and Eventide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Bond Fund and Eventide Healthcare Life, you can compare the effects of market volatilities on Federated Bond and Eventide Healthcare 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 Federated Bond with a short position of Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Bond and Eventide Healthcare.
Diversification Opportunities for Federated Bond and Eventide Healthcare
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Eventide is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Federated Bond Fund and Eventide Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Healthcare Life and Federated Bond 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 Federated Bond Fund are associated (or correlated) with Eventide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Healthcare Life has no effect on the direction of Federated Bond i.e., Federated Bond and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Federated Bond and Eventide Healthcare
Assuming the 90 days horizon Federated Bond Fund is expected to generate 0.15 times more return on investment than Eventide Healthcare. However, Federated Bond Fund is 6.81 times less risky than Eventide Healthcare. It trades about 0.06 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about -0.11 per unit of risk. If you would invest 837.00 in Federated Bond Fund on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Federated Bond Fund or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Bond Fund vs. Eventide Healthcare Life
Performance |
| Timeline |
| Federated Bond |
| Eventide Healthcare Life |
Federated Bond and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Bond and Eventide Healthcare
The main advantage of trading using opposite Federated Bond and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Bond position performs unexpectedly, Eventide Healthcare 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 Healthcare will offset losses from the drop in Eventide Healthcare's long position.| Federated Bond vs. California High Yield Municipal | Federated Bond vs. Counterpoint Tactical Municipal | Federated Bond vs. Old Westbury Municipal | Federated Bond vs. Nuveen Minnesota Municipal |
| Eventide Healthcare vs. Western Asset Municipal | Eventide Healthcare vs. Doubleline Yield Opportunities | Eventide Healthcare vs. Blrc Sgy Mnp | Eventide Healthcare 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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