Correlation Between Barings Corporate and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Barings Corporate 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 Barings Corporate and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Corporate Investors and Eaton Vance Tax, you can compare the effects of market volatilities on Barings Corporate 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 Barings Corporate with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Corporate and Eaton Vance.
Diversification Opportunities for Barings Corporate and Eaton Vance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Eaton is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Barings Corporate 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 Barings Corporate Investors 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 Tax has no effect on the direction of Barings Corporate i.e., Barings Corporate and Eaton Vance go up and down completely randomly.
Pair Corralation between Barings Corporate and Eaton Vance
Considering the 90-day investment horizon Barings Corporate is expected to generate 1.39 times less return on investment than Eaton Vance. In addition to that, Barings Corporate is 2.79 times more volatile than Eaton Vance Tax. It trades about 0.1 of its total potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.39 per unit of volatility. If you would invest 1,430 in Eaton Vance Tax on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Eaton Vance Tax or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Corporate Investors vs. Eaton Vance Tax
Performance |
| Timeline |
| Barings Corporate |
| Eaton Vance Tax |
Barings Corporate and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Corporate and Eaton Vance
The main advantage of trading using opposite Barings Corporate and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Corporate 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.| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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