Correlation Between Eaton Vance and The Hartford
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and The Hartford 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 The Hartford 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 The Hartford Small, you can compare the effects of market volatilities on Eaton Vance and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and The Hartford.
Diversification Opportunities for Eaton Vance and The Hartford
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and The is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Large Cap and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Eaton Vance i.e., Eaton Vance and The Hartford go up and down completely randomly.
Pair Corralation between Eaton Vance and The Hartford
Assuming the 90 days horizon Eaton Vance is expected to generate 1.93 times less return on investment than The Hartford. But when comparing it to its historical volatility, Eaton Vance Large Cap is 1.9 times less risky than The Hartford. It trades about 0.23 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,039 in The Hartford Small on August 28, 2024 and sell it today you would earn a total of 406.00 from holding The Hartford Small or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Large Cap vs. The Hartford Small
Performance |
| Timeline |
| Eaton Vance Large |
| Hartford Small |
Eaton Vance and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and The Hartford
The main advantage of trading using opposite Eaton Vance and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Eaton Vance vs. The Hartford Small | Eaton Vance vs. Massmutual Select Small | Eaton Vance vs. Small Pany Growth | Eaton Vance vs. The Hartford Small |
| The Hartford vs. Allianzgi Convertible Income | The Hartford vs. Fidelity Vertible Securities | The Hartford vs. Teton Vertible Securities | The Hartford vs. Invesco Vertible Securities |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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