Correlation Between Eaton Vance and Baron Wealthbuilder
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Baron Wealthbuilder 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 Eaton Vance and Baron Wealthbuilder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Multi Strategy and Baron Wealthbuilder Fund, you can compare the effects of market volatilities on Eaton Vance and Baron Wealthbuilder 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 Eaton Vance with a short position of Baron Wealthbuilder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Baron Wealthbuilder.
Diversification Opportunities for Eaton Vance and Baron Wealthbuilder
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Baron is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Multi Strategy and Baron Wealthbuilder Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Wealthbuilder and Eaton Vance 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 Eaton Vance Multi Strategy are associated (or correlated) with Baron Wealthbuilder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Wealthbuilder has no effect on the direction of Eaton Vance i.e., Eaton Vance and Baron Wealthbuilder go up and down completely randomly.
Pair Corralation between Eaton Vance and Baron Wealthbuilder
Assuming the 90 days horizon Eaton Vance is expected to generate 7.72 times less return on investment than Baron Wealthbuilder. But when comparing it to its historical volatility, Eaton Vance Multi Strategy is 7.31 times less risky than Baron Wealthbuilder. It trades about 0.17 of its potential returns per unit of risk. Baron Wealthbuilder Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,008 in Baron Wealthbuilder Fund on August 28, 2024 and sell it today you would earn a total of 143.00 from holding Baron Wealthbuilder Fund or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Multi Strategy vs. Baron Wealthbuilder Fund
Performance |
| Timeline |
| Eaton Vance Multi |
| Baron Wealthbuilder |
Eaton Vance and Baron Wealthbuilder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Baron Wealthbuilder
The main advantage of trading using opposite Eaton Vance and Baron Wealthbuilder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Baron Wealthbuilder 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 Baron Wealthbuilder will offset losses from the drop in Baron Wealthbuilder's long position.| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
| Baron Wealthbuilder vs. Baron Real Estate | Baron Wealthbuilder vs. Baron Real Estate | Baron Wealthbuilder vs. Baron Real Estate | Baron Wealthbuilder vs. Baron Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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