Correlation Between Virtus High and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Virtus High 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 Virtus High and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus High Yield and Eaton Vance Short, you can compare the effects of market volatilities on Virtus High 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 Virtus High with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Eaton Vance.
Diversification Opportunities for Virtus High and Eaton Vance
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Eaton is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short and Virtus High 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 Virtus High Yield 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 Short has no effect on the direction of Virtus High i.e., Virtus High and Eaton Vance go up and down completely randomly.
Pair Corralation between Virtus High and Eaton Vance
Assuming the 90 days horizon Virtus High Yield is expected to generate 1.14 times more return on investment than Eaton Vance. However, Virtus High is 1.14 times more volatile than Eaton Vance Short. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Short is currently generating about 0.06 per unit of risk. If you would invest 316.00 in Virtus High Yield on September 12, 2024 and sell it today you would earn a total of 67.00 from holding Virtus High Yield or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus High Yield vs. Eaton Vance Short
Performance |
| Timeline |
| Virtus High Yield |
| Eaton Vance Short |
Virtus High and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Eaton Vance
The main advantage of trading using opposite Virtus High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High 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.| Virtus High vs. SCOR PK | Virtus High vs. Morningstar Unconstrained Allocation | Virtus High vs. Via Renewables | Virtus High vs. Bondbloxx ETF Trust |
| Eaton Vance vs. SCOR PK | Eaton Vance vs. Morningstar Unconstrained Allocation | Eaton Vance vs. Via Renewables | Eaton Vance vs. Bondbloxx ETF Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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