Correlation Between McDonalds and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both McDonalds 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 McDonalds and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Eaton Vance Enhanced, you can compare the effects of market volatilities on McDonalds 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 McDonalds with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Eaton Vance.
Diversification Opportunities for McDonalds and Eaton Vance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between McDonalds and Eaton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Enhanced and McDonalds 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 McDonalds 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 Enhanced has no effect on the direction of McDonalds i.e., McDonalds and Eaton Vance go up and down completely randomly.
Pair Corralation between McDonalds and Eaton Vance
Considering the 90-day investment horizon McDonalds is expected to generate 5.58 times less return on investment than Eaton Vance. In addition to that, McDonalds is 1.16 times more volatile than Eaton Vance Enhanced. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance Enhanced is currently generating about 0.15 per unit of volatility. If you would invest 1,673 in Eaton Vance Enhanced on September 3, 2024 and sell it today you would earn a total of 686.00 from holding Eaton Vance Enhanced or generate 41.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McDonalds vs. Eaton Vance Enhanced
Performance |
| Timeline |
| McDonalds |
| Eaton Vance Enhanced |
McDonalds and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Eaton Vance
The main advantage of trading using opposite McDonalds and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds 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.| McDonalds vs. Highway Holdings Limited | McDonalds vs. QCR Holdings | McDonalds vs. Partner Communications | McDonalds vs. Acumen Pharmaceuticals |
| Eaton Vance vs. Columbia Seligman Premium | Eaton Vance vs. BlackRock Utility Infrastructure | Eaton Vance vs. BlackRock Health Sciences | Eaton Vance vs. BlackRock Science Tech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |