Correlation Between Delek and Eaton Vance

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

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

Diversification Opportunities for Delek and Eaton Vance

-0.55

Correlation Coefficient

Delek  Eaton Vance

Excellent diversification

The 3 months correlation between Delek and Eaton is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Eaton Vance Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Emerging and Delek 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 Delek Group 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 Emerging has no effect on the direction of Delek i.e., Delek and Eaton Vance go up and down completely randomly.

Pair Corralation between Delek and Eaton Vance

Assuming the 90 days horizon Delek is expected to generate 1.23 times less return on investment than Eaton Vance. In addition to that, Delek is 11.44 times more volatile than Eaton Vance Emerging. It trades about 0.01 of its total potential returns per unit of risk. Eaton Vance Emerging is currently generating about 0.14 per unit of volatility. If you would invest  644.00  in Eaton Vance Emerging on February 23, 2024 and sell it today you would earn a total of  148.00  from holding Eaton Vance Emerging or generate 22.98% return on investment over 90 days.

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

Delek Group  vs.  Eaton Vance Emerging

Delek Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Eaton Vance Emerging

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Emerging are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Delek and Eaton Vance

The main advantage of trading using opposite Delek and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek 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 Delek Group and Eaton Vance Emerging 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.