Correlation Between Fidelity 500 and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Fidelity 500 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 Fidelity 500 and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity 500 Index and Eaton Vance Atlanta, you can compare the effects of market volatilities on Fidelity 500 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 Fidelity 500 with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity 500 and Eaton Vance.
Diversification Opportunities for Fidelity 500 and Eaton Vance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Eaton is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 500 Index and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta and Fidelity 500 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 Fidelity 500 Index 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 Atlanta has no effect on the direction of Fidelity 500 i.e., Fidelity 500 and Eaton Vance go up and down completely randomly.
Pair Corralation between Fidelity 500 and Eaton Vance
Assuming the 90 days horizon Fidelity 500 Index is expected to generate 0.89 times more return on investment than Eaton Vance. However, Fidelity 500 Index is 1.12 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Atlanta is currently generating about 0.05 per unit of risk. If you would invest 15,638 in Fidelity 500 Index on January 18, 2024 and sell it today you would earn a total of 1,805 from holding Fidelity 500 Index or generate 11.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity 500 Index vs. Eaton Vance Atlanta
Performance |
Timeline |
Fidelity 500 Index |
Eaton Vance Atlanta |
Fidelity 500 and Eaton Vance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity 500 and Eaton Vance
The main advantage of trading using opposite Fidelity 500 and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 500 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.Fidelity 500 vs. Fidelity Freedom 2015 | Fidelity 500 vs. Fidelity Puritan Fund | Fidelity 500 vs. Fidelity Puritan Fund | Fidelity 500 vs. Fidelity Pennsylvania Municipal |
Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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