Correlation Between Pear Tree and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Pear Tree 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 Pear Tree and Eventide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Eventide Healthcare Life, you can compare the effects of market volatilities on Pear Tree 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 Pear Tree with a short position of Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Eventide Healthcare.
Diversification Opportunities for Pear Tree and Eventide Healthcare
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pear and EVENTIDE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris 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 Pear Tree 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 Pear Tree Polaris 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 Pear Tree i.e., Pear Tree and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Pear Tree and Eventide Healthcare
Assuming the 90 days horizon Pear Tree is expected to generate 2.75 times less return on investment than Eventide Healthcare. But when comparing it to its historical volatility, Pear Tree Polaris is 2.09 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,162 in Eventide Healthcare Life on September 4, 2024 and sell it today you would earn a total of 369.00 from holding Eventide Healthcare Life or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Eventide Healthcare Life
Performance |
| Timeline |
| Pear Tree Polaris |
| Eventide Healthcare Life |
Pear Tree and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Eventide Healthcare
The main advantage of trading using opposite Pear Tree and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree 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.| Pear Tree vs. John Hancock Money | Pear Tree vs. First American Funds | Pear Tree vs. Lord Abbett Emerging | Pear Tree vs. Wt Mutual Fund |
| Eventide Healthcare vs. Scharf Global Opportunity | Eventide Healthcare vs. Nationwide Global Equity | Eventide Healthcare vs. Legg Mason Global | Eventide Healthcare vs. Alliancebernstein Global High |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |