Correlation Between New America and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both New America 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 America 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 America High and Eaton Vance National, you can compare the effects of market volatilities on New America 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 America with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of New America and Eaton Vance.
Diversification Opportunities for New America and Eaton Vance
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Eaton is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding New America High 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 America 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 America 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 National has no effect on the direction of New America i.e., New America and Eaton Vance go up and down completely randomly.
Pair Corralation between New America and Eaton Vance
Considering the 90-day investment horizon New America High is expected to generate 1.12 times more return on investment than Eaton Vance. However, New America is 1.12 times more volatile than Eaton Vance National. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance National is currently generating about 0.03 per unit of risk. If you would invest 596.00 in New America High on September 4, 2024 and sell it today you would earn a total of 234.00 from holding New America High or generate 39.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
New America High vs. Eaton Vance National
Performance |
| Timeline |
| New America High |
| Eaton Vance National |
New America and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New America and Eaton Vance
The main advantage of trading using opposite New America and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New America 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 America vs. Advent Claymore Convertible | New America vs. Blackstone Gso Strategic | New America vs. Western Asset Investment | New America vs. Pioneer Floating Rate |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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