Correlation Between Rational Defensive and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Rational Defensive 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 Rational Defensive and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rational Defensive Growth and Eaton Vance Municipal, you can compare the effects of market volatilities on Rational Defensive 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 Rational Defensive with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Defensive and Eaton Vance.
Diversification Opportunities for Rational Defensive and Eaton Vance
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rational and Eaton is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Rational Defensive Growth and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and Rational Defensive 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 Rational Defensive Growth 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 Municipal has no effect on the direction of Rational Defensive i.e., Rational Defensive and Eaton Vance go up and down completely randomly.
Pair Corralation between Rational Defensive and Eaton Vance
Assuming the 90 days horizon Rational Defensive Growth is expected to generate 3.09 times more return on investment than Eaton Vance. However, Rational Defensive is 3.09 times more volatile than Eaton Vance Municipal. It trades about 0.16 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.08 per unit of risk. If you would invest 3,801 in Rational Defensive Growth on August 26, 2024 and sell it today you would earn a total of 131.00 from holding Rational Defensive Growth or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rational Defensive Growth vs. Eaton Vance Municipal
Performance |
| Timeline |
| Rational Defensive Growth |
| Eaton Vance Municipal |
Rational Defensive and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rational Defensive and Eaton Vance
The main advantage of trading using opposite Rational Defensive and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Defensive 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.| Rational Defensive vs. Nuveen High Yield | Rational Defensive vs. Pioneer High Income | Rational Defensive vs. Victory High Income | Rational Defensive vs. Siit High Yield |
| Eaton Vance vs. Praxis Growth Index | Eaton Vance vs. Chase Growth Fund | Eaton Vance vs. Rational Defensive Growth | Eaton Vance vs. Franklin Growth Opportunities |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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