Correlation Between Eaton Vance and Vela Large
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Vela Large 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 Vela Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Municipal and Vela Large Cap, you can compare the effects of market volatilities on Eaton Vance and Vela Large 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 Vela Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Vela Large.
Diversification Opportunities for Eaton Vance and Vela Large
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eaton and Vela is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Vela Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Large Cap 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 Municipal are associated (or correlated) with Vela Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Large Cap has no effect on the direction of Eaton Vance i.e., Eaton Vance and Vela Large go up and down completely randomly.
Pair Corralation between Eaton Vance and Vela Large
Assuming the 90 days horizon Eaton Vance Municipal is expected to generate 0.35 times more return on investment than Vela Large. However, Eaton Vance Municipal is 2.82 times less risky than Vela Large. It trades about 0.39 of its potential returns per unit of risk. Vela Large Cap is currently generating about 0.04 per unit of risk. If you would invest 1,138 in Eaton Vance Municipal on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Eaton Vance Municipal or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Vela Large Cap
Performance |
| Timeline |
| Eaton Vance Municipal |
| Vela Large Cap |
Eaton Vance and Vela Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Vela Large
The main advantage of trading using opposite Eaton Vance and Vela Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Vela Large 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 Vela Large will offset losses from the drop in Vela Large'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 Mbf |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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