Correlation Between Jpmorgan Government and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Government 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 Jpmorgan Government and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Government Bond and Eaton Vance Large Cap, you can compare the effects of market volatilities on Jpmorgan Government 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 Jpmorgan Government with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Government and Eaton Vance.
Diversification Opportunities for Jpmorgan Government and Eaton Vance
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jpmorgan and Eaton is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Government Bond and Eaton Vance Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Large and Jpmorgan Government 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 Jpmorgan Government Bond 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 Large has no effect on the direction of Jpmorgan Government i.e., Jpmorgan Government and Eaton Vance go up and down completely randomly.
Pair Corralation between Jpmorgan Government and Eaton Vance
Assuming the 90 days horizon Jpmorgan Government is expected to generate 6.76 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Jpmorgan Government Bond is 1.95 times less risky than Eaton Vance. It trades about 0.02 of its potential returns per unit of risk. Eaton Vance Large Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,316 in Eaton Vance Large Cap on August 27, 2024 and sell it today you would earn a total of 485.00 from holding Eaton Vance Large Cap or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Government Bond vs. Eaton Vance Large Cap
Performance |
| Timeline |
| Jpmorgan Government Bond |
| Eaton Vance Large |
Jpmorgan Government and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Government and Eaton Vance
The main advantage of trading using opposite Jpmorgan Government and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Government 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 Jpmorgan Government Bond and Eaton Vance Large Cap 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.
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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