Correlation Between Eaton Vance and Aberdeen Japan
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Aberdeen Japan 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 Aberdeen Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Mbf and Aberdeen Japan Equity, you can compare the effects of market volatilities on Eaton Vance and Aberdeen Japan 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 Aberdeen Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Aberdeen Japan.
Diversification Opportunities for Eaton Vance and Aberdeen Japan
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Aberdeen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Mbf and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan Equity 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 Mbf are associated (or correlated) with Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Eaton Vance i.e., Eaton Vance and Aberdeen Japan go up and down completely randomly.
Pair Corralation between Eaton Vance and Aberdeen Japan
Considering the 90-day investment horizon Eaton Vance Mbf is expected to under-perform the Aberdeen Japan. But the fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Mbf is 1.92 times less risky than Aberdeen Japan. The fund trades about -0.08 of its potential returns per unit of risk. The Aberdeen Japan Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Aberdeen Japan Equity on November 1, 2024 and sell it today you would earn a total of 12.00 from holding Aberdeen Japan Equity or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Mbf vs. Aberdeen Japan Equity
Performance |
| Timeline |
| Eaton Vance Mbf |
| Aberdeen Japan Equity |
Eaton Vance and Aberdeen Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Aberdeen Japan
The main advantage of trading using opposite Eaton Vance and Aberdeen Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Aberdeen Japan 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 Aberdeen Japan will offset losses from the drop in Aberdeen Japan's long position.| Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance California | Eaton Vance vs. Eaton Vance New | Eaton Vance vs. BlackRock Municipal Income |
| Aberdeen Japan vs. Fulcrum Diversified Absolute | Aberdeen Japan vs. The Gabelli Small | Aberdeen Japan vs. Davenport Small Cap | Aberdeen Japan vs. Stone Ridge 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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