Correlation Between Eventide Multi-asset and Eventide Global

Can any of the company-specific risk be diversified away by investing in both Eventide Multi-asset 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 Multi-asset 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 Multi Asset Income and Eventide Global Dividend, you can compare the effects of market volatilities on Eventide Multi-asset 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 Multi-asset with a short position of Eventide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Multi-asset and Eventide Global.

Diversification Opportunities for Eventide Multi-asset and Eventide Global

0.98

Correlation Coefficient

Eventide Multi-asset  Eventide Global

Almost no diversification

The 3 months correlation between Eventide and Eventide is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Multi Asset Income 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 Multi-asset 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 Multi Asset Income 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 Multi-asset i.e., Eventide Multi-asset and Eventide Global go up and down completely randomly.

Pair Corralation between Eventide Multi-asset and Eventide Global

Assuming the 90 days horizon Eventide Multi-asset is expected to generate 1.95 times less return on investment than Eventide Global. But when comparing it to its historical volatility, Eventide Multi Asset Income is 1.7 times less risky than Eventide Global. It trades about 0.18 of its potential returns per unit of risk. Eventide Global Dividend is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,842  in Eventide Global Dividend on September 5, 2024 and sell it today you would earn a total of  190.00  from holding Eventide Global Dividend or generate 10.31% return on investment over 90 days.

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

Eventide Multi Asset Income  vs.  Eventide Global Dividend

Eventide Multi Asset

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Multi Asset Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Eventide Multi-asset 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 January 2025.

Pair Trading with Eventide Multi-asset and Eventide Global

The main advantage of trading using opposite Eventide Multi-asset and Eventide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventide Multi-asset 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 Multi Asset Income 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.