Correlation Between Calumet Specialty and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Calumet Specialty and Eaton Vance 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 Calumet Specialty and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calumet Specialty Products and Eaton Vance Multi Strategy, you can compare the effects of market volatilities on Calumet Specialty and Eaton Vance 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 Calumet Specialty with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Eaton Vance.

Diversification Opportunities for Calumet Specialty and Eaton Vance

-0.58

Correlation Coefficient

Calumet Specialty  Eaton Vance

Excellent diversification

The 3 months correlation between Calumet and Eaton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Eaton Vance Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Multi and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Multi has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Eaton Vance go up and down completely randomly.

Pair Corralation between Calumet Specialty and Eaton Vance

Given the investment horizon of 90 days Calumet Specialty Products is expected to generate 12.73 times more return on investment than Eaton Vance. However, Calumet Specialty is 12.73 times more volatile than Eaton Vance Multi Strategy. It trades about 0.28 of its potential returns per unit of risk. Eaton Vance Multi Strategy is currently generating about 0.0 per unit of risk. If you would invest  1,380  in Calumet Specialty Products on January 26, 2024 and sell it today you would earn a total of  178.00  from holding Calumet Specialty Products or generate 12.9% return on investment over 90 days.

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

Calumet Specialty Products  vs.  Eaton Vance Multi Strategy

Calumet Specialty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calumet Specialty Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Calumet Specialty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Eaton Vance Multi

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Multi Strategy are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calumet Specialty and Eaton Vance

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

The idea behind Calumet Specialty Products and Eaton Vance Multi Strategy 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.