Correlation Between Eaton Vance and Invesco California
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Invesco California 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 Invesco California 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 Invesco California Value, you can compare the effects of market volatilities on Eaton Vance and Invesco California 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 Invesco California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Invesco California.
Diversification Opportunities for Eaton Vance and Invesco California
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eaton and Invesco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Invesco California Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco California Value 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 Invesco California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco California Value has no effect on the direction of Eaton Vance i.e., Eaton Vance and Invesco California go up and down completely randomly.
Pair Corralation between Eaton Vance and Invesco California
Considering the 90-day investment horizon Eaton Vance Senior is expected to generate 1.66 times more return on investment than Invesco California. However, Eaton Vance is 1.66 times more volatile than Invesco California Value. It trades about 0.07 of its potential returns per unit of risk. Invesco California Value is currently generating about 0.05 per unit of risk. If you would invest 433.00 in Eaton Vance Senior on September 1, 2024 and sell it today you would earn a total of 196.00 from holding Eaton Vance Senior or generate 45.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Senior vs. Invesco California Value
Performance |
| Timeline |
| Eaton Vance Senior |
| Invesco California Value |
Eaton Vance and Invesco California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Invesco California
The main advantage of trading using opposite Eaton Vance and Invesco California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Invesco California 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 Invesco California will offset losses from the drop in Invesco California'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 |
| Invesco California vs. Pimco California Municipal | Invesco California vs. Invesco Pennsylvania Value | Invesco California vs. Nuveen California Dividend | Invesco California vs. Invesco Advantage MIT |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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