Correlation Between Embark Commodity and Eventide Healthcare

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

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

Diversification Opportunities for Embark Commodity and Eventide Healthcare

0.61

Correlation Coefficient

Embark Commodity  Eventide Healthcare

Poor diversification

The 3 months correlation between Embark and Eventide is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy 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 Embark Commodity 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 Embark Commodity Strategy 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 Embark Commodity i.e., Embark Commodity and Eventide Healthcare go up and down completely randomly.

Pair Corralation between Embark Commodity and Eventide Healthcare

Assuming the 90 days horizon Embark Commodity is expected to generate 2.39 times less return on investment than Eventide Healthcare. But when comparing it to its historical volatility, Embark Commodity Strategy is 2.09 times less risky than Eventide Healthcare. It trades about 0.09 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,090  in Eventide Healthcare Life on April 30, 2025 and sell it today you would earn a total of  282.00  from holding Eventide Healthcare Life or generate 9.13% return on investment over 90 days.

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

Embark Commodity Strategy  vs.  Eventide Healthcare Life

Embark Commodity Strategy

Risk-Adjusted Performance

OK

Over the last 90 days Embark Commodity Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Embark Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 Embark Commodity and Eventide Healthcare

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

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.