Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Eaton Vance Global, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Eaton Vance.
Diversification Opportunities for Vanguard Emerging and Eaton Vance
The 3 months correlation between Vanguard and Eaton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Eaton Vance Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Global and Vanguard Emerging 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 Vanguard Emerging Markets 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 Global has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Eaton Vance go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Eaton Vance
If you would invest 3,428 in Vanguard Emerging Markets on March 5, 2024 and sell it today you would earn a total of 157.00 from holding Vanguard Emerging Markets or generate 4.58% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Global are ranked lower than 5 (%) 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.