Correlation Between Highland Long/short and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Eventide Healthcare 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 Highland Long/short and Eventide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Eventide Healthcare Life, you can compare the effects of market volatilities on Highland Long/short and Eventide Healthcare 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 Highland Long/short with a short position of Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Eventide Healthcare.
Diversification Opportunities for Highland Long/short and Eventide Healthcare
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and Eventide is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Eventide Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Healthcare Life and Highland Long/short 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 Highland Longshort Healthcare are associated (or correlated) with Eventide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Healthcare Life has no effect on the direction of Highland Long/short i.e., Highland Long/short and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Highland Long/short and Eventide Healthcare
Assuming the 90 days horizon Highland Long/short is expected to generate 1.46 times less return on investment than Eventide Healthcare. But when comparing it to its historical volatility, Highland Longshort Healthcare is 4.38 times less risky than Eventide Healthcare. It trades about 0.37 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,161 in Eventide Healthcare Life on April 3, 2025 and sell it today you would earn a total of 81.00 from holding Eventide Healthcare Life or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Eventide Healthcare Life
Performance |
| Timeline |
| Highland Long/short |
| Eventide Healthcare Life |
Highland Long/short and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Eventide Healthcare
The main advantage of trading using opposite Highland Long/short and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Eventide Healthcare 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 Healthcare will offset losses from the drop in Eventide Healthcare's long position.| Highland Long/short vs. Pender Real Estate | Highland Long/short vs. Short Real Estate | Highland Long/short vs. Baron Real Estate | Highland Long/short vs. Redwood Real Estate |
| Eventide Healthcare vs. Ambrus Core Bond | Eventide Healthcare vs. Multisector Bond Sma | Eventide Healthcare vs. Ab Bond Inflation | Eventide Healthcare vs. Old Westbury Fixed |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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