Correlation Between Federated Institutional and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Federated Institutional and Eaton Vance 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 Federated Institutional and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Institutional High and Eaton Vance Michigan, you can compare the effects of market volatilities on Federated Institutional and Eaton Vance 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 Federated Institutional with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Institutional and Eaton Vance.
Diversification Opportunities for Federated Institutional and Eaton Vance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FEDERATED and Eaton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Institutional High and Eaton Vance Michigan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Michigan and Federated Institutional 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 Federated Institutional High are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Michigan has no effect on the direction of Federated Institutional i.e., Federated Institutional and Eaton Vance go up and down completely randomly.
Pair Corralation between Federated Institutional and Eaton Vance
If you would invest 817.00 in Federated Institutional High on September 2, 2024 and sell it today you would earn a total of 78.00 from holding Federated Institutional High or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Federated Institutional High vs. Eaton Vance Michigan
Performance |
| Timeline |
| Federated Institutional |
| Eaton Vance Michigan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Federated Institutional and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Institutional and Eaton Vance
The main advantage of trading using opposite Federated Institutional and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Institutional position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.The idea behind Federated Institutional High and Eaton Vance Michigan 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.
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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