Correlation Between Eaton Vance and American Century
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Large Cap and American Century High, you can compare the effects of market volatilities on Eaton Vance and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and American Century.
Diversification Opportunities for Eaton Vance and American Century
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Large Cap and American Century High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century High 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 Large Cap are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century High has no effect on the direction of Eaton Vance i.e., Eaton Vance and American Century go up and down completely randomly.
Pair Corralation between Eaton Vance and American Century
Assuming the 90 days horizon Eaton Vance Large Cap is expected to generate 2.43 times more return on investment than American Century. However, Eaton Vance is 2.43 times more volatile than American Century High. It trades about 0.06 of its potential returns per unit of risk. American Century High is currently generating about 0.13 per unit of risk. If you would invest 2,263 in Eaton Vance Large Cap on September 4, 2024 and sell it today you would earn a total of 533.00 from holding Eaton Vance Large Cap or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eaton Vance Large Cap vs. American Century High
Performance |
| Timeline |
| Eaton Vance Large |
| American Century High |
Eaton Vance and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and American Century
The main advantage of trading using opposite Eaton Vance and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Eaton Vance vs. Siit High Yield | Eaton Vance vs. Artisan High Income | Eaton Vance vs. Fidelity Capital Income | Eaton Vance vs. T Rowe Price |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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