Correlation Between Eaton Vance and Vanguard Small
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Vanguard Small 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 Vanguard Small 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 Vanguard Small Cap Index, you can compare the effects of market volatilities on Eaton Vance and Vanguard Small 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 Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Vanguard Small.
Diversification Opportunities for Eaton Vance and Vanguard Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eaton and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Vanguard Small Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Eaton Vance i.e., Eaton Vance and Vanguard Small go up and down completely randomly.
Pair Corralation between Eaton Vance and Vanguard Small
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.64 times more return on investment than Vanguard Small. However, Eaton Vance Enhanced is 1.57 times less risky than Vanguard Small. It trades about 0.48 of its potential returns per unit of risk. Vanguard Small Cap Index is currently generating about 0.03 per unit of risk. If you would invest 2,284 in Eaton Vance Enhanced on September 13, 2024 and sell it today you would earn a total of 129.00 from holding Eaton Vance Enhanced or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Enhanced vs. Vanguard Small Cap Index
Performance |
| Timeline |
| Eaton Vance Enhanced |
| Vanguard Small Cap |
Eaton Vance and Vanguard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Vanguard Small
The main advantage of trading using opposite Eaton Vance and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Vanguard Small 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 Vanguard Small will offset losses from the drop in Vanguard Small'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 |
| Vanguard Small vs. Vanguard Mid Cap Index | Vanguard Small vs. Vanguard Small Cap Value | Vanguard Small vs. Vanguard FTSE Emerging | Vanguard Small vs. Vanguard Large Cap Index |
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 CEOs Directory module to screen CEOs from public companies around the world.
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