Correlation Between Eaton Vance and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Eaton Vance and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Cornerstone Strategic.
Diversification Opportunities for Eaton Vance and Cornerstone Strategic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eaton and Cornerstone is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Eaton Vance i.e., Eaton Vance and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Eaton Vance and Cornerstone Strategic
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Cornerstone Strategic. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 2.31 times less risky than Cornerstone Strategic. The stock trades about -0.21 of its potential returns per unit of risk. The Cornerstone Strategic Return is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 833.00 in Cornerstone Strategic Return on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Cornerstone Strategic Return or generate 9.84% 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. Cornerstone Strategic Return
Performance |
| Timeline |
| Eaton Vance National |
| Cornerstone Strategic |
Eaton Vance and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Cornerstone Strategic
The main advantage of trading using opposite Eaton Vance and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic'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 |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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