Correlation Between Ultra Fund and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Ultra Fund 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 Ultra Fund and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Fund Y and Eaton Vance California, you can compare the effects of market volatilities on Ultra Fund 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 Ultra Fund with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Fund and Eaton Vance.
Diversification Opportunities for Ultra Fund and Eaton Vance
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and Eaton is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Fund Y and Eaton Vance California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance California and Ultra Fund 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 Ultra Fund Y 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 California has no effect on the direction of Ultra Fund i.e., Ultra Fund and Eaton Vance go up and down completely randomly.
Pair Corralation between Ultra Fund and Eaton Vance
Assuming the 90 days horizon Ultra Fund Y is expected to generate 2.35 times more return on investment than Eaton Vance. However, Ultra Fund is 2.35 times more volatile than Eaton Vance California. It trades about 0.1 of its potential returns per unit of risk. Eaton Vance California is currently generating about 0.01 per unit of risk. If you would invest 10,047 in Ultra Fund Y on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Ultra Fund Y or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Fund Y vs. Eaton Vance California
Performance |
| Timeline |
| Ultra Fund Y |
| Eaton Vance California |
Ultra Fund and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Fund and Eaton Vance
The main advantage of trading using opposite Ultra Fund and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Fund 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.| Ultra Fund vs. International Growth Fund | Ultra Fund vs. Heritage Fund Investor | Ultra Fund vs. Janus Global Research |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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