Correlation Between Eaton Vance and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and IShares Trust 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 IShares Trust 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 iShares Trust, you can compare the effects of market volatilities on Eaton Vance and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and IShares Trust.
Diversification Opportunities for Eaton Vance and IShares Trust
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eaton and IShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Eaton Vance i.e., Eaton Vance and IShares Trust go up and down completely randomly.
Pair Corralation between Eaton Vance and IShares Trust
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.2 times more return on investment than IShares Trust. However, Eaton Vance is 1.2 times more volatile than iShares Trust. It trades about 0.5 of its potential returns per unit of risk. iShares Trust is currently generating about 0.13 per unit of risk. If you would invest 2,192 in Eaton Vance Enhanced on September 3, 2024 and sell it today you would earn a total of 157.00 from holding Eaton Vance Enhanced or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Enhanced vs. iShares Trust
Performance |
| Timeline |
| Eaton Vance Enhanced |
| iShares Trust |
Eaton Vance and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and IShares Trust
The main advantage of trading using opposite Eaton Vance and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust'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 |
| IShares Trust vs. VanEck Vectors Moodys | IShares Trust vs. Xtrackers California Municipal | IShares Trust vs. Vanguard ESG Corporate | IShares Trust vs. Vanguard Intermediate Term Corporate |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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