Correlation Between Eaton Vance and Queens Road

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Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Queens Road 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 Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Large Cap and Queens Road Small, you can compare the effects of market volatilities on Eaton Vance and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Queens Road.

Diversification Opportunities for Eaton Vance and Queens Road

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Eaton and QUEENS is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Large Cap and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small 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 Large Cap are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of Eaton Vance i.e., Eaton Vance and Queens Road go up and down completely randomly.

Pair Corralation between Eaton Vance and Queens Road

Assuming the 90 days horizon Eaton Vance is expected to generate 1.59 times less return on investment than Queens Road. But when comparing it to its historical volatility, Eaton Vance Large Cap is 1.63 times less risky than Queens Road. It trades about 0.27 of its potential returns per unit of risk. Queens Road Small is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  4,042  in Queens Road Small on August 28, 2024 and sell it today you would earn a total of  322.00  from holding Queens Road Small or generate 7.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Eaton Vance Large Cap  vs.  Queens Road Small

 Performance 
       Timeline  
Eaton Vance Large 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Queens Road Small 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Small are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Queens Road may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Eaton Vance and Queens Road Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eaton Vance and Queens Road

The main advantage of trading using opposite Eaton Vance and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.
The idea behind Eaton Vance Large Cap and Queens Road Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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