Correlation Between Red Oak and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Red Oak 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 Red Oak and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and Eaton Vance Floating Rate, you can compare the effects of market volatilities on Red Oak 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 Red Oak with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Eaton Vance.
Diversification Opportunities for Red Oak and Eaton Vance
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Red and Eaton is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and Eaton Vance Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Floating and Red Oak 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 Red Oak Technology 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 Floating has no effect on the direction of Red Oak i.e., Red Oak and Eaton Vance go up and down completely randomly.
Pair Corralation between Red Oak and Eaton Vance
Assuming the 90 days horizon Red Oak is expected to generate 1.35 times less return on investment than Eaton Vance. In addition to that, Red Oak is 11.72 times more volatile than Eaton Vance Floating Rate. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance Floating Rate is currently generating about 0.25 per unit of volatility. If you would invest 825.00 in Eaton Vance Floating Rate on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Eaton Vance Floating Rate or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. Eaton Vance Floating Rate
Performance |
| Timeline |
| Red Oak Technology |
| Eaton Vance Floating |
Red Oak and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Eaton Vance
The main advantage of trading using opposite Red Oak and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak 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.| Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus | Red Oak vs. Janus Global Technology |
| Eaton Vance vs. Vanguard Telecommunication Services | Eaton Vance vs. Gmo Equity Allocation | Eaton Vance vs. Federated Equity Income | Eaton Vance vs. Ultra Short Term Fixed |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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