Correlation Between Central Securities and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Central Securities 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 Central Securities and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Securities and Eaton Vance Tax, you can compare the effects of market volatilities on Central Securities 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 Central Securities with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Securities and Eaton Vance.
Diversification Opportunities for Central Securities and Eaton Vance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Central and Eaton is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Central Securities and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Central Securities 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 Central Securities 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 Central Securities i.e., Central Securities and Eaton Vance go up and down completely randomly.
Pair Corralation between Central Securities and Eaton Vance
Considering the 90-day investment horizon Central Securities is expected to generate 1.81 times more return on investment than Eaton Vance. However, Central Securities is 1.81 times more volatile than Eaton Vance Tax. It trades about 0.21 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.36 per unit of risk. If you would invest 4,474 in Central Securities on August 24, 2024 and sell it today you would earn a total of 190.00 from holding Central Securities or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Securities vs. Eaton Vance Tax
Performance |
| Timeline |
| Central Securities |
| Eaton Vance Tax |
Central Securities and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Securities and Eaton Vance
The main advantage of trading using opposite Central Securities and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Securities 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.| Central Securities vs. Invesco High Income | Central Securities vs. Munivest Fund | Central Securities vs. DWS Municipal Income | Central Securities vs. Blackrock Muniyield Quality |
| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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