Correlation Between Eaton Vance and Hartford International
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Hartford International 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 Hartford International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance E and The Hartford International, you can compare the effects of market volatilities on Eaton Vance and Hartford International 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 Hartford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Hartford International.
Diversification Opportunities for Eaton Vance and Hartford International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Hartford is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance E and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford International 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 E are associated (or correlated) with Hartford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford International has no effect on the direction of Eaton Vance i.e., Eaton Vance and Hartford International go up and down completely randomly.
Pair Corralation between Eaton Vance and Hartford International
Assuming the 90 days horizon Eaton Vance is expected to generate 2.4 times less return on investment than Hartford International. But when comparing it to its historical volatility, Eaton Vance E is 2.04 times less risky than Hartford International. It trades about 0.06 of its potential returns per unit of risk. The Hartford International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,507 in The Hartford International on September 12, 2024 and sell it today you would earn a total of 436.00 from holding The Hartford International or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eaton Vance E vs. The Hartford International
Performance |
| Timeline |
| Eaton Vance E |
| Hartford International |
Eaton Vance and Hartford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Hartford International
The main advantage of trading using opposite Eaton Vance and Hartford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Hartford International 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 Hartford International will offset losses from the drop in Hartford International's long position.| Eaton Vance vs. Delaware Limited Term Diversified | Eaton Vance vs. Oppenheimer International Diversified | Eaton Vance vs. Pimco Diversified Income | Eaton Vance vs. Fidelity Advisor Diversified |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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