Correlation Between Eaton Vance and Invesco FTSE
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Invesco FTSE 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 Invesco FTSE 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 Invesco FTSE RAFI, you can compare the effects of market volatilities on Eaton Vance and Invesco FTSE 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 Invesco FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Invesco FTSE.
Diversification Opportunities for Eaton Vance and Invesco FTSE
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eaton and Invesco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Invesco FTSE RAFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco FTSE RAFI 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 Invesco FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco FTSE RAFI has no effect on the direction of Eaton Vance i.e., Eaton Vance and Invesco FTSE go up and down completely randomly.
Pair Corralation between Eaton Vance and Invesco FTSE
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.13 times more return on investment than Invesco FTSE. However, Eaton Vance is 1.13 times more volatile than Invesco FTSE RAFI. It trades about 0.15 of its potential returns per unit of risk. Invesco FTSE RAFI is currently generating about 0.05 per unit of risk. If you would invest 1,672 in Eaton Vance Enhanced on September 2, 2024 and sell it today you would earn a total of 677.00 from holding Eaton Vance Enhanced or generate 40.49% 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. Invesco FTSE RAFI
Performance |
| Timeline |
| Eaton Vance Enhanced |
| Invesco FTSE RAFI |
Eaton Vance and Invesco FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Invesco FTSE
The main advantage of trading using opposite Eaton Vance and Invesco FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Invesco FTSE 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 Invesco FTSE will offset losses from the drop in Invesco FTSE'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 |
| Invesco FTSE vs. Invesco FTSE RAFI | Invesco FTSE vs. Invesco FTSE RAFI | Invesco FTSE vs. Invesco FTSE RAFI | Invesco FTSE vs. Invesco DWA Developed |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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