Correlation Between Us Small and Eventide Healthcare

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

By analyzing existing cross correlation between Us Small Cap and Eventide Healthcare Life, you can compare the effects of market volatilities on Us Small 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 Us Small with a short position of Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Small and Eventide Healthcare.

Diversification Opportunities for Us Small and Eventide Healthcare

0.78

Correlation Coefficient

Us Small  Eventide Healthcare

Poor diversification

The 3 months correlation between DFSTX and Eventide is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Us Small Cap 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 Us Small 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 Us Small Cap 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 Us Small i.e., Us Small and Eventide Healthcare go up and down completely randomly.

Pair Corralation between Us Small and Eventide Healthcare

Assuming the 90 days horizon Us Small Cap is expected to generate 0.72 times more return on investment than Eventide Healthcare. However, Us Small Cap is 1.4 times less risky than Eventide Healthcare. It trades about 0.19 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.1 per unit of risk. If you would invest  4,358  in Us Small Cap on April 30, 2025 and sell it today you would earn a total of  586.00  from holding Us Small Cap or generate 13.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Us Small Cap  vs.  Eventide Healthcare Life

Us Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us Small Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us Small showed solid returns over the last few months and may actually be approaching a breakup point.

Eventide Healthcare Life

Risk-Adjusted Performance

OK

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

Pair Trading with Us Small and Eventide Healthcare

The main advantage of trading using opposite Us Small and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Small 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.

The idea behind Us Small Cap and Eventide Healthcare Life 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.