Correlation Between Intermediate Term and Eventide Large

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

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

Diversification Opportunities for Intermediate Term and Eventide Large

0.39

Correlation Coefficient

Intermediate Term  Eventide Large

Weak diversification

The 3 months correlation between Intermediate and Eventide is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Bond Fund and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap and Intermediate Term 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 Intermediate Term Bond Fund are associated (or correlated) with Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Intermediate Term i.e., Intermediate Term and Eventide Large go up and down completely randomly.

Pair Corralation between Intermediate Term and Eventide Large

Assuming the 90 days horizon Intermediate Term is expected to generate 38.59 times less return on investment than Eventide Large. But when comparing it to its historical volatility, Intermediate Term Bond Fund is 2.6 times less risky than Eventide Large. It trades about 0.02 of its potential returns per unit of risk. Eventide Large Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,374  in Eventide Large Cap on April 30, 2025 and sell it today you would earn a total of  198.00  from holding Eventide Large Cap or generate 14.41% return on investment over 90 days.

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

Intermediate Term Bond Fund  vs.  Eventide Large Cap

Intermediate Term Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Term Bond Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intermediate Term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eventide Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Large Cap are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eventide Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intermediate Term and Eventide Large

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

The idea behind Intermediate Term Bond Fund and Eventide Large Cap 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.