Correlation Between Eaton Vance and AMEREN

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Can any of the company-specific risk be diversified away by investing in both Eaton Vance and AMEREN 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 AMEREN 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 AMEREN ILL 37, you can compare the effects of market volatilities on Eaton Vance and AMEREN 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 AMEREN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and AMEREN.

Diversification Opportunities for Eaton Vance and AMEREN

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Eaton and AMEREN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and AMEREN ILL 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMEREN ILL 37 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 AMEREN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMEREN ILL 37 has no effect on the direction of Eaton Vance i.e., Eaton Vance and AMEREN go up and down completely randomly.

Pair Corralation between Eaton Vance and AMEREN

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.55 times more return on investment than AMEREN. However, Eaton Vance Enhanced is 1.82 times less risky than AMEREN. It trades about 0.44 of its potential returns per unit of risk. AMEREN ILL 37 is currently generating about 0.17 per unit of risk. If you would invest  2,202  in Eaton Vance Enhanced on September 2, 2024 and sell it today you would earn a total of  147.00  from holding Eaton Vance Enhanced or generate 6.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy80.95%
ValuesDaily Returns

Eaton Vance Enhanced  vs.  AMEREN ILL 37

 Performance 
       Timeline  
Eaton Vance Enhanced 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Eaton Vance unveiled solid returns over the last few months and may actually be approaching a breakup point.
AMEREN ILL 37 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AMEREN ILL 37 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMEREN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance and AMEREN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eaton Vance and AMEREN

The main advantage of trading using opposite Eaton Vance and AMEREN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, AMEREN 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 AMEREN will offset losses from the drop in AMEREN's long position.
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The idea behind Eaton Vance Enhanced and AMEREN ILL 37 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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