Correlation Between Gmo High and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Gmo High 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 Gmo High and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Eaton Vance Income, you can compare the effects of market volatilities on Gmo High 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 Gmo High with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Eaton Vance.
Diversification Opportunities for Gmo High and Eaton Vance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GMO and Eaton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Eaton Vance Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Income and Gmo High 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 Gmo High Yield 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 Income has no effect on the direction of Gmo High i.e., Gmo High and Eaton Vance go up and down completely randomly.
Pair Corralation between Gmo High and Eaton Vance
Assuming the 90 days horizon Gmo High Yield is expected to generate 1.21 times more return on investment than Eaton Vance. However, Gmo High is 1.21 times more volatile than Eaton Vance Income. It trades about 0.36 of its potential returns per unit of risk. Eaton Vance Income is currently generating about 0.19 per unit of risk. If you would invest 1,784 in Gmo High Yield on September 4, 2024 and sell it today you would earn a total of 24.00 from holding Gmo High Yield or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Eaton Vance Income
Performance |
| Timeline |
| Gmo High Yield |
| Eaton Vance Income |
Gmo High and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Eaton Vance
The main advantage of trading using opposite Gmo High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High 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.| Gmo High vs. California High Yield Municipal | Gmo High vs. Siit High Yield | Gmo High vs. Pace High Yield |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Mbf |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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