Correlation Between Procter Gamble and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Eaton Vance Enhanced, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Eaton Vance.
Diversification Opportunities for Procter Gamble and Eaton Vance
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Eaton is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble 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 Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Eaton Vance go up and down completely randomly.
Pair Corralation between Procter Gamble and Eaton Vance
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 2.18 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Procter Gamble is 1.08 times less risky than Eaton Vance. It trades about 0.05 of its potential returns per unit of risk. Eaton Vance Enhanced is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,445 in Eaton Vance Enhanced on September 3, 2024 and sell it today you would earn a total of 904.00 from holding Eaton Vance Enhanced or generate 62.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Eaton Vance Enhanced
Performance |
| Timeline |
| Procter Gamble |
| Eaton Vance Enhanced |
Procter Gamble and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Eaton Vance
The main advantage of trading using opposite Procter Gamble and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Highway Holdings Limited | Procter Gamble vs. QCR Holdings | Procter Gamble vs. Partner Communications | Procter Gamble 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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