Correlation Between Ab Small and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Eaton Vance Short, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Eaton Vance.
Diversification Opportunities for Ab Small and Eaton Vance
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between QUAKX and Eaton is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Eaton Vance go up and down completely randomly.
Pair Corralation between Ab Small and Eaton Vance
Assuming the 90 days horizon Ab Small Cap is expected to generate 9.15 times more return on investment than Eaton Vance. However, Ab Small is 9.15 times more volatile than Eaton Vance Short. It trades about 0.28 of its potential returns per unit of risk. Eaton Vance Short is currently generating about 0.08 per unit of risk. If you would invest 6,535 in Ab Small Cap on September 2, 2024 and sell it today you would earn a total of 605.00 from holding Ab Small Cap or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Eaton Vance Short
Performance |
| Timeline |
| Ab Small Cap |
| Eaton Vance Short |
Ab Small and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Eaton Vance
The main advantage of trading using opposite Ab Small and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.The idea behind Ab Small Cap and Eaton Vance Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eaton Vance vs. Legg Mason Partners | Eaton Vance vs. Touchstone Small Cap | Eaton Vance vs. Small Pany Growth | Eaton Vance vs. Ab Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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