Correlation Between Eventide Limited-term and Eventide Global

Can any of the company-specific risk be diversified away by investing in both Eventide Limited-term and Eventide Global 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 Eventide Limited-term and Eventide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eventide Limited Term Bond and Eventide Global Dividend, you can compare the effects of market volatilities on Eventide Limited-term and Eventide Global 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 Eventide Limited-term with a short position of Eventide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Limited-term and Eventide Global.

Diversification Opportunities for Eventide Limited-term and Eventide Global

-0.47

Correlation Coefficient

Eventide Limited-term  Eventide Global

Very good diversification

The 3 months correlation between Eventide and Eventide is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Limited Term Bond and Eventide Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Global Dividend and Eventide Limited-term 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 Eventide Limited Term Bond are associated (or correlated) with Eventide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Global Dividend has no effect on the direction of Eventide Limited-term i.e., Eventide Limited-term and Eventide Global go up and down completely randomly.

Pair Corralation between Eventide Limited-term and Eventide Global

Assuming the 90 days horizon Eventide Limited Term Bond is expected to under-perform the Eventide Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eventide Limited Term Bond is 5.65 times less risky than Eventide Global. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Eventide Global Dividend is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,859  in Eventide Global Dividend on August 31, 2024 and sell it today you would earn a total of  188.00  from holding Eventide Global Dividend or generate 10.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eventide Limited Term Bond  vs.  Eventide Global Dividend

Eventide Limited Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventide Limited Term Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Eventide Limited-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eventide Global Dividend

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Global Dividend are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Eventide Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Eventide Limited-term and Eventide Global

The main advantage of trading using opposite Eventide Limited-term and Eventide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Limited-term position performs unexpectedly, Eventide Global 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 Global will offset losses from the drop in Eventide Global's long position.

The idea behind Eventide Limited Term Bond and Eventide Global Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.