Correlation Between Eventide Gilead and Multimedia Portfolio

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

By analyzing existing cross correlation between Eventide Gilead Fund and Multimedia Portfolio Multimedia, you can compare the effects of market volatilities on Eventide Gilead and Multimedia Portfolio 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 Gilead with a short position of Multimedia Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Gilead and Multimedia Portfolio.

Diversification Opportunities for Eventide Gilead and Multimedia Portfolio

0.65

Correlation Coefficient

Eventide Gilead  Multimedia Portfolio

Poor diversification

The 3 months correlation between Eventide and Multimedia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Gilead Fund and Multimedia Portfolio Multimedi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimedia Portfolio and Eventide Gilead 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 Gilead Fund are associated (or correlated) with Multimedia Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimedia Portfolio has no effect on the direction of Eventide Gilead i.e., Eventide Gilead and Multimedia Portfolio go up and down completely randomly.

Pair Corralation between Eventide Gilead and Multimedia Portfolio

Assuming the 90 days horizon Eventide Gilead Fund is expected to under-perform the Multimedia Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eventide Gilead Fund is 1.26 times less risky than Multimedia Portfolio. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Multimedia Portfolio Multimedia is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  11,173  in Multimedia Portfolio Multimedia on September 28, 2024 and sell it today you would earn a total of  326.00  from holding Multimedia Portfolio Multimedia or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Eventide Gilead Fund  vs.  Multimedia Portfolio Multimedi

Eventide Gilead

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Gilead Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Eventide Gilead is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Multimedia Portfolio

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multimedia Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eventide Gilead and Multimedia Portfolio

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

The idea behind Eventide Gilead Fund and Multimedia Portfolio Multimedia 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.