Correlation Between Eventide Gilead and Health Care

Can any of the company-specific risk be diversified away by investing in both Eventide Gilead and Health Care 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 Health Care 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 Health Care Services, you can compare the effects of market volatilities on Eventide Gilead and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Gilead and Health Care.

Diversification Opportunities for Eventide Gilead and Health Care

-0.01

Correlation Coefficient

Eventide Gilead  Health Care

Good diversification

The 3 months correlation between Eventide and Health is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Gilead Fund and Health Care Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Services 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Services has no effect on the direction of Eventide Gilead i.e., Eventide Gilead and Health Care go up and down completely randomly.

Pair Corralation between Eventide Gilead and Health Care

Assuming the 90 days horizon Eventide Gilead Fund is expected to generate 0.49 times more return on investment than Health Care. However, Eventide Gilead Fund is 2.03 times less risky than Health Care. It trades about -0.11 of its potential returns per unit of risk. Health Care Services is currently generating about -0.36 per unit of risk. If you would invest  5,252  in Eventide Gilead Fund on October 8, 2024 and sell it today you would lose (144.00) from holding Eventide Gilead Fund or give up 2.74% of portfolio value over 90 days.

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

Eventide Gilead Fund  vs.  Health Care Services

Eventide Gilead

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Gilead Fund are ranked lower than 4 (%) 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.

Health Care Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Health Care Services has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Eventide Gilead and Health Care

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

The idea behind Eventide Gilead Fund and Health Care Services 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.