Correlation Between Eaton Vance and Baron Health
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Baron Health 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 Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Short and Baron Health Care, you can compare the effects of market volatilities on Eaton Vance and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Baron Health.
Diversification Opportunities for Eaton Vance and Baron Health
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eaton and Baron is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Short and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Short are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Eaton Vance i.e., Eaton Vance and Baron Health go up and down completely randomly.
Pair Corralation between Eaton Vance and Baron Health
Assuming the 90 days horizon Eaton Vance Short is not expected to generate positive returns. However, Eaton Vance Short is 11.1 times less risky than Baron Health. It waists most of its returns potential to compensate for thr risk taken. Baron Health is generating about -0.23 per unit of risk. If you would invest 899.00 in Eaton Vance Short on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Eaton Vance Short or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Short vs. Baron Health Care
Performance |
| Timeline |
| Eaton Vance Short |
| Baron Health Care |
Eaton Vance and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Baron Health
The main advantage of trading using opposite Eaton Vance and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Eaton Vance vs. Hsbc Treasury Money | Eaton Vance vs. Franklin Government Money | Eaton Vance vs. Matson Money Equity | Eaton Vance vs. The Gabelli Money |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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