Correlation Between Eaton Vance and Liberty All
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Liberty All 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 Liberty All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance National and Liberty All Star, you can compare the effects of market volatilities on Eaton Vance and Liberty All 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 Liberty All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Liberty All.
Diversification Opportunities for Eaton Vance and Liberty All
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Liberty is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Liberty All Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty All Star 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 National are associated (or correlated) with Liberty All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty All Star has no effect on the direction of Eaton Vance i.e., Eaton Vance and Liberty All go up and down completely randomly.
Pair Corralation between Eaton Vance and Liberty All
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Liberty All. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 2.59 times less risky than Liberty All. The stock trades about -0.05 of its potential returns per unit of risk. The Liberty All Star is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 554.00 in Liberty All Star on August 29, 2024 and sell it today you would earn a total of 31.00 from holding Liberty All Star or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. Liberty All Star
Performance |
| Timeline |
| Eaton Vance National |
| Liberty All Star |
Eaton Vance and Liberty All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Liberty All
The main advantage of trading using opposite Eaton Vance and Liberty All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Liberty All 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 Liberty All will offset losses from the drop in Liberty All's long position.| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
| Liberty All vs. Gabelli Global Small | Liberty All vs. MFS Investment Grade | Liberty All vs. Eaton Vance National | Liberty All vs. GAMCO Natural Resources |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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