Correlation Between Eaton Vance and Legal General
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Legal General 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 Legal General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Senior and Legal General Group, you can compare the effects of market volatilities on Eaton Vance and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Legal General.
Diversification Opportunities for Eaton Vance and Legal General
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eaton and Legal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Legal General Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General Group 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 Senior are associated (or correlated) with Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General Group has no effect on the direction of Eaton Vance i.e., Eaton Vance and Legal General go up and down completely randomly.
Pair Corralation between Eaton Vance and Legal General
Considering the 90-day investment horizon Eaton Vance Senior is expected to generate 0.43 times more return on investment than Legal General. However, Eaton Vance Senior is 2.33 times less risky than Legal General. It trades about 0.19 of its potential returns per unit of risk. Legal General Group is currently generating about -0.09 per unit of risk. If you would invest 615.00 in Eaton Vance Senior on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Eaton Vance Senior or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Senior vs. Legal General Group
Performance |
| Timeline |
| Eaton Vance Senior |
| Legal General Group |
Eaton Vance and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Legal General
The main advantage of trading using opposite Eaton Vance and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select |
| Legal General vs. Starfleet Innotech | Legal General vs. Flow Capital Corp | Legal General vs. Ameritrans Capital Corp | Legal General vs. Blackhawk Growth Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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