Correlation Between Eaton Vance and IShares Latin
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and IShares Latin 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 Latin 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 Latin America, you can compare the effects of market volatilities on Eaton Vance and IShares Latin 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 Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and IShares Latin.
Diversification Opportunities for Eaton Vance and IShares Latin
-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 Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Latin America 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 Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Latin America has no effect on the direction of Eaton Vance i.e., Eaton Vance and IShares Latin go up and down completely randomly.
Pair Corralation between Eaton Vance and IShares Latin
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.78 times more return on investment than IShares Latin. However, Eaton Vance Enhanced is 1.27 times less risky than IShares Latin. It trades about 0.31 of its potential returns per unit of risk. iShares Latin America is currently generating about -0.24 per unit of risk. If you would invest 2,208 in Eaton Vance Enhanced on August 28, 2024 and sell it today you would earn a total of 107.00 from holding Eaton Vance Enhanced or generate 4.85% 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 Latin America
Performance |
| Timeline |
| Eaton Vance Enhanced |
| iShares Latin America |
Eaton Vance and IShares Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and IShares Latin
The main advantage of trading using opposite Eaton Vance and IShares Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, IShares Latin 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 Latin will offset losses from the drop in IShares Latin'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 Latin vs. iShares China Large Cap | IShares Latin vs. iShares MSCI Mexico | IShares Latin vs. iShares MSCI South | IShares Latin vs. iShares MSCI Japan |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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