Correlation Between Emerald Growth and Eventide Gilead
Can any of the company-specific risk be diversified away by investing in both Emerald Growth and Eventide Gilead 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 Emerald Growth and Eventide Gilead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Growth Fund and Eventide Gilead Fund, you can compare the effects of market volatilities on Emerald Growth and Eventide Gilead 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 Emerald Growth with a short position of Eventide Gilead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Growth and Eventide Gilead.
Diversification Opportunities for Emerald Growth and Eventide Gilead
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerald and EVENTIDE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Growth Fund and Eventide Gilead Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Gilead and Emerald Growth 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 Emerald Growth Fund are associated (or correlated) with Eventide Gilead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Gilead has no effect on the direction of Emerald Growth i.e., Emerald Growth and Eventide Gilead go up and down completely randomly.
Pair Corralation between Emerald Growth and Eventide Gilead
Assuming the 90 days horizon Emerald Growth Fund is expected to generate 1.35 times more return on investment than Eventide Gilead. However, Emerald Growth is 1.35 times more volatile than Eventide Gilead Fund. It trades about 0.22 of its potential returns per unit of risk. Eventide Gilead Fund is currently generating about 0.24 per unit of risk. If you would invest 2,491 in Emerald Growth Fund on August 29, 2024 and sell it today you would earn a total of 216.00 from holding Emerald Growth Fund or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Growth Fund vs. Eventide Gilead Fund
Performance |
| Timeline |
| Emerald Growth |
| Eventide Gilead |
Emerald Growth and Eventide Gilead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Growth and Eventide Gilead
The main advantage of trading using opposite Emerald Growth and Eventide Gilead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Growth position performs unexpectedly, Eventide Gilead 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 Gilead will offset losses from the drop in Eventide Gilead's long position.| Emerald Growth vs. Putnam Equity Income | Emerald Growth vs. Putnam Growth Opportunities | Emerald Growth vs. HUMANA INC | Emerald Growth vs. Aquagold International |
| Eventide Gilead vs. T Rowe Price | Eventide Gilead vs. T Rowe Price | Eventide Gilead vs. T Rowe Price | Eventide Gilead 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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