Correlation Between Poplar Forest and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Poplar Forest 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 Poplar Forest and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poplar Forest Partners and Eaton Vance Atlanta, you can compare the effects of market volatilities on Poplar Forest 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 Poplar Forest with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poplar Forest and Eaton Vance.
Diversification Opportunities for Poplar Forest and Eaton Vance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Poplar and Eaton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Poplar Forest Partners and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta and Poplar Forest 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 Poplar Forest Partners 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 Atlanta has no effect on the direction of Poplar Forest i.e., Poplar Forest and Eaton Vance go up and down completely randomly.
Pair Corralation between Poplar Forest and Eaton Vance
Assuming the 90 days horizon Poplar Forest Partners is expected to generate 0.92 times more return on investment than Eaton Vance. However, Poplar Forest Partners is 1.09 times less risky than Eaton Vance. It trades about 0.24 of its potential returns per unit of risk. Eaton Vance Atlanta is currently generating about 0.2 per unit of risk. If you would invest 5,369 in Poplar Forest Partners on August 30, 2024 and sell it today you would earn a total of 274.00 from holding Poplar Forest Partners or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poplar Forest Partners vs. Eaton Vance Atlanta
Performance |
| Timeline |
| Poplar Forest Partners |
| Eaton Vance Atlanta |
Poplar Forest and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poplar Forest and Eaton Vance
The main advantage of trading using opposite Poplar Forest and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poplar Forest 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.| Poplar Forest vs. Poplar Forest Partners | Poplar Forest vs. Amg Gwk Small | Poplar Forest vs. Columbia Select Large Cap | Poplar Forest vs. T Rowe Price |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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