Correlation Between Eaton Vance and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Vanguard 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 Vanguard 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 Vanguard FTSE Pacific, you can compare the effects of market volatilities on Eaton Vance and Vanguard 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Vanguard FTSE.
Diversification Opportunities for Eaton Vance and Vanguard FTSE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Vanguard is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Vanguard FTSE Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Pacific 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Pacific has no effect on the direction of Eaton Vance i.e., Eaton Vance and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Eaton Vance and Vanguard FTSE
Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.09 times more return on investment than Vanguard FTSE. However, Eaton Vance is 1.09 times more volatile than Vanguard FTSE Pacific. It trades about 0.11 of its potential returns per unit of risk. Vanguard FTSE Pacific is currently generating about 0.05 per unit of risk. If you would invest 1,438 in Eaton Vance Enhanced on September 12, 2024 and sell it today you would earn a total of 973.00 from holding Eaton Vance Enhanced or generate 67.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Enhanced vs. Vanguard FTSE Pacific
Performance |
| Timeline |
| Eaton Vance Enhanced |
| Vanguard FTSE Pacific |
Eaton Vance and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Vanguard FTSE
The main advantage of trading using opposite Eaton Vance and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Vanguard 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 Vanguard FTSE will offset losses from the drop in Vanguard 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 |
| Vanguard FTSE vs. Vanguard FTSE Europe | Vanguard FTSE vs. Vanguard Large Cap Index | Vanguard FTSE vs. Vanguard Materials Index | Vanguard FTSE vs. Vanguard FTSE All World |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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