Correlation Between Encore Capital and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Encore Capital 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 Encore Capital and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and Eaton Vance National, you can compare the effects of market volatilities on Encore Capital 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 Encore Capital with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Eaton Vance.
Diversification Opportunities for Encore Capital and Eaton Vance
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Encore and Eaton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and Encore Capital 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 Encore Capital 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 National has no effect on the direction of Encore Capital i.e., Encore Capital and Eaton Vance go up and down completely randomly.
Pair Corralation between Encore Capital and Eaton Vance
Given the investment horizon of 90 days Encore Capital is expected to generate 1.67 times less return on investment than Eaton Vance. In addition to that, Encore Capital is 5.11 times more volatile than Eaton Vance National. It trades about 0.01 of its total potential returns per unit of risk. Eaton Vance National is currently generating about 0.06 per unit of volatility. If you would invest 1,618 in Eaton Vance National on August 28, 2024 and sell it today you would earn a total of 87.00 from holding Eaton Vance National or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Encore Capital Group vs. Eaton Vance National
Performance |
| Timeline |
| Encore Capital Group |
| Eaton Vance National |
Encore Capital and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Eaton Vance
The main advantage of trading using opposite Encore Capital and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital 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.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |