Correlation Between Eaton Vance and Tortoise Energy

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

By analyzing existing cross correlation between Eaton Vance National and Tortoise Energy Independence, you can compare the effects of market volatilities on Eaton Vance and Tortoise Energy 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 Tortoise Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Tortoise Energy.

Diversification Opportunities for Eaton Vance and Tortoise Energy

-0.79

Correlation Coefficient

Eaton Vance  Tortoise Energy

Pay attention - limited upside

The 3 months correlation between Eaton and Tortoise is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Tortoise Energy Independence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Energy Inde 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 National are associated (or correlated) with Tortoise Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Energy Inde has no effect on the direction of Eaton Vance i.e., Eaton Vance and Tortoise Energy go up and down completely randomly.

Pair Corralation between Eaton Vance and Tortoise Energy

Considering the 90-day investment horizon Eaton Vance is expected to generate 4.38 times less return on investment than Tortoise Energy. But when comparing it to its historical volatility, Eaton Vance National is 1.6 times less risky than Tortoise Energy. It trades about 0.02 of its potential returns per unit of risk. Tortoise Energy Independence is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,362  in Tortoise Energy Independence on February 16, 2024 and sell it today you would earn a total of  1,032  from holding Tortoise Energy Independence or generate 43.69% return on investment over 90 days.

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

Eaton Vance National  vs.  Tortoise Energy Independence

Eaton Vance National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic 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.

Tortoise Energy Inde

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Energy Independence are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively unfluctuating fundamental indicators, Tortoise Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eaton Vance and Tortoise Energy

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

The idea behind Eaton Vance National and Tortoise Energy Independence 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .