Correlation Between Eaton Vance and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Aberdeen China 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 Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Greater and Aberdeen China Oppty, you can compare the effects of market volatilities on Eaton Vance and Aberdeen China 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 Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Aberdeen China.
Diversification Opportunities for Eaton Vance and Aberdeen China
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Aberdeen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Greater and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 Greater are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Eaton Vance i.e., Eaton Vance and Aberdeen China go up and down completely randomly.
Pair Corralation between Eaton Vance and Aberdeen China
Assuming the 90 days horizon Eaton Vance Greater is expected to generate 0.56 times more return on investment than Aberdeen China. However, Eaton Vance Greater is 1.78 times less risky than Aberdeen China. It trades about 0.1 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.01 per unit of risk. If you would invest 3,177 in Eaton Vance Greater on September 2, 2024 and sell it today you would earn a total of 1,083 from holding Eaton Vance Greater or generate 34.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Greater vs. Aberdeen China Oppty
Performance |
| Timeline |
| Eaton Vance Greater |
| Aberdeen China Oppty |
Eaton Vance and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Aberdeen China
The main advantage of trading using opposite Eaton Vance and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.The idea behind Eaton Vance Greater and Aberdeen China Oppty 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.| Aberdeen China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Gbl Eq |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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