Correlation Between Eaton Vance and Grant Park
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Grant Park 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 Grant Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Tax and Grant Park Multi, you can compare the effects of market volatilities on Eaton Vance and Grant Park 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 Grant Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Grant Park.
Diversification Opportunities for Eaton Vance and Grant Park
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eaton and Grant is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Grant Park Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grant Park Multi 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 Tax are associated (or correlated) with Grant Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grant Park Multi has no effect on the direction of Eaton Vance i.e., Eaton Vance and Grant Park go up and down completely randomly.
Pair Corralation between Eaton Vance and Grant Park
Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 1.85 times more return on investment than Grant Park. However, Eaton Vance is 1.85 times more volatile than Grant Park Multi. It trades about 0.2 of its potential returns per unit of risk. Grant Park Multi is currently generating about 0.25 per unit of risk. If you would invest 1,491 in Eaton Vance Tax on September 12, 2024 and sell it today you would earn a total of 29.00 from holding Eaton Vance Tax or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Tax vs. Grant Park Multi
Performance |
| Timeline |
| Eaton Vance Tax |
| Grant Park Multi |
Eaton Vance and Grant Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Grant Park
The main advantage of trading using opposite Eaton Vance and Grant Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Grant Park 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 Grant Park will offset losses from the drop in Grant Park's long position.| Eaton Vance vs. Oxford Lane Capital | Eaton Vance vs. Orchid Island Capital | Eaton Vance vs. Guggenheim Strategic Opportunities | Eaton Vance vs. Stone Harbor Emerging |
| Grant Park vs. Pimco Trends Managed | Grant Park vs. Pimco Trends Managed | Grant Park vs. SCOR PK | Grant Park vs. Morningstar Unconstrained Allocation |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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