Correlation Between Voya High and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Voya High 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 Voya High and Eventide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Eventide Healthcare Life, you can compare the effects of market volatilities on Voya High 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 Voya High with a short position of Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Eventide Healthcare.
Diversification Opportunities for Voya High and Eventide Healthcare
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Eventide is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield 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 Voya High 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 Voya High Yield 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 Voya High i.e., Voya High and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Voya High and Eventide Healthcare
Assuming the 90 days horizon Voya High is expected to generate 3.08 times less return on investment than Eventide Healthcare. But when comparing it to its historical volatility, Voya High Yield is 7.96 times less risky than Eventide Healthcare. It trades about 0.03 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,465 in Eventide Healthcare Life on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Eventide Healthcare Life or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Voya High Yield vs. Eventide Healthcare Life
Performance |
| Timeline |
| Voya High Yield |
| Eventide Healthcare Life |
Voya High and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Eventide Healthcare
The main advantage of trading using opposite Voya High and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High 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.| Voya High vs. Icon Information Technology | Voya High vs. Dreyfus Technology Growth | Voya High vs. Pgim Jennison Technology | Voya High vs. Columbia Global Technology |
| Eventide Healthcare vs. Morningstar Defensive Bond | Eventide Healthcare vs. Ab Global Bond | Eventide Healthcare vs. Old Westbury California | Eventide Healthcare vs. Barings High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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