Correlation Between Eaton Vance and New Germany
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and New Germany 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 New Germany 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 New Germany Closed, you can compare the effects of market volatilities on Eaton Vance and New Germany 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 New Germany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and New Germany.
Diversification Opportunities for Eaton Vance and New Germany
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and New is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and New Germany Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Germany Closed 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 New Germany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Germany Closed has no effect on the direction of Eaton Vance i.e., Eaton Vance and New Germany go up and down completely randomly.
Pair Corralation between Eaton Vance and New Germany
Considering the 90-day investment horizon Eaton Vance National is expected to generate 0.83 times more return on investment than New Germany. However, Eaton Vance National is 1.21 times less risky than New Germany. It trades about 0.03 of its potential returns per unit of risk. New Germany Closed is currently generating about -0.01 per unit of risk. If you would invest 1,580 in Eaton Vance National on August 31, 2024 and sell it today you would earn a total of 156.00 from holding Eaton Vance National or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. New Germany Closed
Performance |
| Timeline |
| Eaton Vance National |
| New Germany Closed |
Eaton Vance and New Germany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and New Germany
The main advantage of trading using opposite Eaton Vance and New Germany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, New Germany 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 New Germany will offset losses from the drop in New Germany'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 |
| New Germany vs. MFS Investment Grade | New Germany vs. Eaton Vance Municipal | New Germany vs. DTF Tax Free | New Germany vs. HUMANA INC |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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