Correlation Between Eaton Vance and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Premium, you can compare the effects of market volatilities on Eaton Vance and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Columbia Seligman.
Diversification Opportunities for Eaton Vance and Columbia Seligman
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eaton and Columbia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Columbia Seligman Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Premium 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Premium has no effect on the direction of Eaton Vance i.e., Eaton Vance and Columbia Seligman go up and down completely randomly.
Pair Corralation between Eaton Vance and Columbia Seligman
Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.71 times more return on investment than Columbia Seligman. However, Eaton Vance Tax is 1.41 times less risky than Columbia Seligman. It trades about 0.14 of its potential returns per unit of risk. Columbia Seligman Premium is currently generating about 0.06 per unit of risk. If you would invest 1,307 in Eaton Vance Tax on September 1, 2024 and sell it today you would earn a total of 206.00 from holding Eaton Vance Tax or generate 15.76% 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 Tax vs. Columbia Seligman Premium
Performance |
| Timeline |
| Eaton Vance Tax |
| Columbia Seligman Premium |
Eaton Vance and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Columbia Seligman
The main advantage of trading using opposite Eaton Vance and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman's long position.| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax Managed | Eaton Vance vs. Eaton Vance Risk | Eaton Vance vs. Eaton Vance Tax |
| Columbia Seligman vs. Eaton Vance Enhanced | Columbia Seligman vs. BlackRock Utility Infrastructure | Columbia Seligman vs. BlackRock Health Sciences | Columbia Seligman vs. BlackRock Science Tech |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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