Correlation Between First American and Eventide Large
Can any of the company-specific risk be diversified away by investing in both First American and Eventide Large 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 First American and Eventide Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Eventide Large Cap, you can compare the effects of market volatilities on First American and Eventide Large 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 First American with a short position of Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Eventide Large.
Diversification Opportunities for First American and Eventide Large
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Eventide is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap and First American 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 First American Funds are associated (or correlated) with Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of First American i.e., First American and Eventide Large go up and down completely randomly.
Pair Corralation between First American and Eventide Large
If you would invest 100.00 in First American Funds on September 12, 2024 and sell it today you would earn a total of 0.00 from holding First American Funds or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. Eventide Large Cap
Performance |
| Timeline |
| First American Funds |
| Eventide Large Cap |
First American and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Eventide Large
The main advantage of trading using opposite First American and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Eventide Large 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 Large will offset losses from the drop in Eventide Large's long position.| First American vs. Siit Ultra Short | First American vs. Quantitative Longshort Equity | First American vs. Rbc Short Duration | First American vs. Franklin Federal Limited Term |
| Eventide Large vs. Praxis Growth Index | Eventide Large vs. Qs Defensive Growth | Eventide Large vs. Needham Aggressive Growth | Eventide Large vs. Rational Defensive Growth |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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