Correlation Between Carlyle and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Eaton Vance California, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Eaton Vance.
Diversification Opportunities for Carlyle and Eaton Vance
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlyle and Eaton is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group 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 Carlyle 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 Carlyle Group 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 Carlyle i.e., Carlyle and Eaton Vance go up and down completely randomly.
Pair Corralation between Carlyle and Eaton Vance
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 5.74 times more return on investment than Eaton Vance. However, Carlyle is 5.74 times more volatile than Eaton Vance California. It trades about 0.07 of its potential returns per unit of risk. Eaton Vance California is currently generating about 0.29 per unit of risk. If you would invest 5,077 in Carlyle Group on August 30, 2024 and sell it today you would earn a total of 193.00 from holding Carlyle Group or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Eaton Vance California
Performance |
| Timeline |
| Carlyle Group |
| Eaton Vance California |
Carlyle and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Eaton Vance
The main advantage of trading using opposite Carlyle and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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.The idea behind Carlyle Group and Eaton Vance California 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.| Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Nuveen California Amt | Eaton Vance vs. Invesco California Value |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |