Correlation Between Eaton Vance and GAMCO Natural
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and GAMCO Natural 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 GAMCO Natural 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 GAMCO Natural Resources, you can compare the effects of market volatilities on Eaton Vance and GAMCO Natural 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 GAMCO Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and GAMCO Natural.
Diversification Opportunities for Eaton Vance and GAMCO Natural
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and GAMCO is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and GAMCO Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Natural Resources 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 GAMCO Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Natural Resources has no effect on the direction of Eaton Vance i.e., Eaton Vance and GAMCO Natural go up and down completely randomly.
Pair Corralation between Eaton Vance and GAMCO Natural
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the GAMCO Natural. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 2.33 times less risky than GAMCO Natural. The stock trades about -0.24 of its potential returns per unit of risk. The GAMCO Natural Resources is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 591.00 in GAMCO Natural Resources on August 25, 2024 and sell it today you would lose (9.00) from holding GAMCO Natural Resources or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. GAMCO Natural Resources
Performance |
| Timeline |
| Eaton Vance National |
| GAMCO Natural Resources |
Eaton Vance and GAMCO Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and GAMCO Natural
The main advantage of trading using opposite Eaton Vance and GAMCO Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, GAMCO Natural 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 GAMCO Natural will offset losses from the drop in GAMCO Natural's long position.| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Federated Premier Municipal |
| GAMCO Natural vs. MFS High Income | GAMCO Natural vs. MFS Investment Grade | GAMCO Natural vs. Eaton Vance National | GAMCO Natural vs. Invesco High Income |
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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