Correlation Between Eaton Vance and Home Depot
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Home Depot 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 Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Enhanced and Home Depot, you can compare the effects of market volatilities on Eaton Vance and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Home Depot.
Diversification Opportunities for Eaton Vance and Home Depot
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Home is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Enhanced are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Eaton Vance i.e., Eaton Vance and Home Depot go up and down completely randomly.
Pair Corralation between Eaton Vance and Home Depot
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.44 times more return on investment than Home Depot. However, Eaton Vance Enhanced is 2.3 times less risky than Home Depot. It trades about 0.47 of its potential returns per unit of risk. Home Depot is currently generating about 0.14 per unit of risk. If you would invest 2,288 in Eaton Vance Enhanced on September 12, 2024 and sell it today you would earn a total of 129.00 from holding Eaton Vance Enhanced or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Enhanced vs. Home Depot
Performance |
| Timeline |
| Eaton Vance Enhanced |
| Home Depot |
Eaton Vance and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Home Depot
The main advantage of trading using opposite Eaton Vance and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Eaton Vance vs. Columbia Seligman Premium | Eaton Vance vs. BlackRock Utility Infrastructure | Eaton Vance vs. BlackRock Health Sciences | Eaton Vance vs. BlackRock Science Tech |
| Home Depot vs. Victory Integrity Smallmid Cap | Home Depot vs. Hilton Worldwide Holdings | Home Depot vs. NVIDIA | Home Depot vs. JPMorgan Chase Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |