Correlation Between Eaton Vance and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Atlanta and Dodge Cox Stock, you can compare the effects of market volatilities on Eaton Vance and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Dodge Cox.
Diversification Opportunities for Eaton Vance and Dodge Cox
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eaton and Dodge is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Atlanta and Dodge Cox Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Stock 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 Atlanta are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Stock has no effect on the direction of Eaton Vance i.e., Eaton Vance and Dodge Cox go up and down completely randomly.
Pair Corralation between Eaton Vance and Dodge Cox
Assuming the 90 days horizon Eaton Vance Atlanta is expected to generate 1.11 times more return on investment than Dodge Cox. However, Eaton Vance is 1.11 times more volatile than Dodge Cox Stock. It trades about 0.26 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.19 per unit of risk. If you would invest 3,687 in Eaton Vance Atlanta on August 30, 2024 and sell it today you would earn a total of 214.00 from holding Eaton Vance Atlanta or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Atlanta vs. Dodge Cox Stock
Performance |
| Timeline |
| Eaton Vance Atlanta |
| Dodge Cox Stock |
Eaton Vance and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Dodge Cox
The main advantage of trading using opposite Eaton Vance and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Eaton Vance vs. Dodge Cox Stock | Eaton Vance vs. Upright Assets Allocation | Eaton Vance vs. Pace Large Growth | Eaton Vance vs. Hartford Moderate Allocation |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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