Correlation Between Eaton Vance and Invesco DWA
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Invesco DWA 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 DWA 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 DWA Consumer, you can compare the effects of market volatilities on Eaton Vance and Invesco DWA 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 DWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Invesco DWA.
Diversification Opportunities for Eaton Vance and Invesco DWA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Invesco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Invesco DWA Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DWA Consumer 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 DWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DWA Consumer has no effect on the direction of Eaton Vance i.e., Eaton Vance and Invesco DWA go up and down completely randomly.
Pair Corralation between Eaton Vance and Invesco DWA
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.68 times less return on investment than Invesco DWA. But when comparing it to its historical volatility, Eaton Vance Enhanced is 1.05 times less risky than Invesco DWA. It trades about 0.31 of its potential returns per unit of risk. Invesco DWA Consumer is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 10,163 in Invesco DWA Consumer on August 27, 2024 and sell it today you would earn a total of 845.00 from holding Invesco DWA Consumer or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Enhanced vs. Invesco DWA Consumer
Performance |
| Timeline |
| Eaton Vance Enhanced |
| Invesco DWA Consumer |
Eaton Vance and Invesco DWA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Invesco DWA
The main advantage of trading using opposite Eaton Vance and Invesco DWA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Invesco DWA 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 DWA will offset losses from the drop in Invesco DWA'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 DWA vs. Invesco DWA Consumer | Invesco DWA vs. Invesco DWA Basic | Invesco DWA vs. Invesco DWA Industrials | Invesco DWA vs. Invesco DWA Utilities |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |