Can any of the company-specific risk be diversified away by investing in both Eaton Vance 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 Eaton Vance and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Floating and Eaton Vance Tax Managed, you can compare the effects of market volatilities on Eaton Vance 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 Eaton Vance with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Eaton Vance.
Diversification Opportunities for Eaton Vance and Eaton Vance
The 3 months correlation between Eaton and Eaton is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and Eaton Vance Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Eaton Vance 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 Eaton Vance Floating 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 Tax has no effect on the direction of Eaton Vance i.e., Eaton Vance and Eaton Vance go up and down completely randomly.
Pair Corralation between Eaton Vance and Eaton Vance
Considering the 90-day investment horizon Eaton Vance Floating is expected to generate 0.72 times more return on investment than Eaton Vance. However, Eaton Vance Floating is 1.38 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Tax Managed is currently generating about 0.05 per unit of risk. If you would invest 998.00 in Eaton Vance Floating on March 6, 2024 and sell it today you would earn a total of 331.00 from holding Eaton Vance Floating or generate 33.17% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax Managed are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.