Correlation Between Eaton Vance and T REX
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and T REX 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 T REX 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 T REX 2X Long, you can compare the effects of market volatilities on Eaton Vance and T REX 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 T REX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and T REX.
Diversification Opportunities for Eaton Vance and T REX
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and TSLT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and T REX 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T REX 2X 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 T REX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T REX 2X has no effect on the direction of Eaton Vance i.e., Eaton Vance and T REX go up and down completely randomly.
Pair Corralation between Eaton Vance and T REX
Considering the 90-day investment horizon Eaton Vance is expected to generate 7.32 times less return on investment than T REX. But when comparing it to its historical volatility, Eaton Vance Enhanced is 8.36 times less risky than T REX. It trades about 0.13 of its potential returns per unit of risk. T REX 2X Long is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,069 in T REX 2X Long on September 3, 2024 and sell it today you would earn a total of 1,839 from holding T REX 2X Long or generate 172.03% 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. T REX 2X Long
Performance |
| Timeline |
| Eaton Vance Enhanced |
| T REX 2X |
Eaton Vance and T REX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and T REX
The main advantage of trading using opposite Eaton Vance and T REX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, T REX 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 T REX will offset losses from the drop in T REX'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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