Correlation Between American Balanced and Eventide Multi
Can any of the company-specific risk be diversified away by investing in both American Balanced and Eventide Multi 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 American Balanced and Eventide Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Eventide Multi Asset Income, you can compare the effects of market volatilities on American Balanced and Eventide Multi 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 American Balanced with a short position of Eventide Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Eventide Multi.
Diversification Opportunities for American Balanced and Eventide Multi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Eventide is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Eventide Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Multi Asset and American Balanced 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 American Balanced Fund are associated (or correlated) with Eventide Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Multi Asset has no effect on the direction of American Balanced i.e., American Balanced and Eventide Multi go up and down completely randomly.
Pair Corralation between American Balanced and Eventide Multi
Assuming the 90 days horizon American Balanced is expected to generate 1.5 times less return on investment than Eventide Multi. But when comparing it to its historical volatility, American Balanced Fund is 1.05 times less risky than Eventide Multi. It trades about 0.28 of its potential returns per unit of risk. Eventide Multi Asset Income is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,445 in Eventide Multi Asset Income on September 1, 2024 and sell it today you would earn a total of 62.00 from holding Eventide Multi Asset Income or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Eventide Multi Asset Income
Performance |
| Timeline |
| American Balanced |
| Eventide Multi Asset |
American Balanced and Eventide Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Eventide Multi
The main advantage of trading using opposite American Balanced and Eventide Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Eventide Multi 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 Multi will offset losses from the drop in Eventide Multi's long position.| American Balanced vs. Western Asset Municipal | American Balanced vs. Fa 529 Aggressive | American Balanced vs. Fabxx | American Balanced vs. Rbb Fund |
| Eventide Multi vs. Eventide Gilead Fund | Eventide Multi vs. Eventide Healthcare Life | Eventide Multi vs. Eventide Global Dividend | Eventide Multi vs. Eventide Exponential Technologies |
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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