Correlation Between New Germany and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both New Germany 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 New Germany and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Germany Closed and Eaton Vance National, you can compare the effects of market volatilities on New Germany 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 New Germany with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Germany and Eaton Vance.
Diversification Opportunities for New Germany and Eaton Vance
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Eaton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding New Germany Closed and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and New Germany 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 New Germany Closed 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 National has no effect on the direction of New Germany i.e., New Germany and Eaton Vance go up and down completely randomly.
Pair Corralation between New Germany and Eaton Vance
Allowing for the 90-day total investment horizon New Germany Closed is expected to under-perform the Eaton Vance. In addition to that, New Germany is 1.21 times more volatile than Eaton Vance National. It trades about -0.01 of its total potential returns per unit of risk. Eaton Vance National is currently generating about 0.03 per unit of volatility. If you would invest 1,580 in Eaton Vance National on August 31, 2024 and sell it today you would earn a total of 156.00 from holding Eaton Vance National or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Germany Closed vs. Eaton Vance National
Performance |
| Timeline |
| New Germany Closed |
| Eaton Vance National |
New Germany and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Germany and Eaton Vance
The main advantage of trading using opposite New Germany and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Germany 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.| New Germany vs. MFS Investment Grade | New Germany vs. Eaton Vance Municipal | New Germany vs. DTF Tax Free | New Germany vs. HUMANA INC |
| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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