Correlation Between Old Westbury and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Eaton Vance Large Cap, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Eaton Vance.
Diversification Opportunities for Old Westbury and Eaton Vance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Eaton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal 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 Old Westbury 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 Old Westbury Municipal 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 Old Westbury i.e., Old Westbury and Eaton Vance go up and down completely randomly.
Pair Corralation between Old Westbury and Eaton Vance
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.29 times more return on investment than Eaton Vance. However, Old Westbury Municipal is 3.42 times less risky than Eaton Vance. It trades about 0.3 of its potential returns per unit of risk. Eaton Vance Large Cap is currently generating about -0.14 per unit of risk. If you would invest 1,145 in Old Westbury Municipal on November 29, 2024 and sell it today you would earn a total of 11.00 from holding Old Westbury Municipal or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Eaton Vance Large Cap
Performance |
| Timeline |
| Old Westbury Municipal |
| Eaton Vance Large |
Old Westbury and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Eaton Vance
The main advantage of trading using opposite Old Westbury and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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.| Old Westbury vs. Goldman Sachs Financial | Old Westbury vs. Icon Financial Fund | Old Westbury vs. Fidelity Advisor Financial | Old Westbury vs. 1919 Financial Services |
| Eaton Vance vs. Bbh Partner Fund | Eaton Vance vs. Ultra Short Fixed Income | Eaton Vance vs. Doubleline Emerging Markets | Eaton Vance vs. Nationwide E Plus |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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