Correlation Between Washington Mutual and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Washington Mutual 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 Washington Mutual and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Mutual Investors and Eaton Vance Growth, you can compare the effects of market volatilities on Washington Mutual 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 Washington Mutual with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Eaton Vance.
Diversification Opportunities for Washington Mutual and Eaton Vance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Eaton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Eaton Vance Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Growth and Washington Mutual 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 Washington Mutual Investors 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 Growth has no effect on the direction of Washington Mutual i.e., Washington Mutual and Eaton Vance go up and down completely randomly.
Pair Corralation between Washington Mutual and Eaton Vance
Assuming the 90 days horizon Washington Mutual is expected to generate 1.17 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Washington Mutual Investors is 1.64 times less risky than Eaton Vance. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,901 in Eaton Vance Growth on August 24, 2024 and sell it today you would earn a total of 470.00 from holding Eaton Vance Growth or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Eaton Vance Growth
Performance |
| Timeline |
| Washington Mutual |
| Eaton Vance Growth |
Washington Mutual and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Eaton Vance
The main advantage of trading using opposite Washington Mutual and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual 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.| Washington Mutual vs. Vanguard Small Cap Index | Washington Mutual vs. Vanguard Mid Cap Index | Washington Mutual vs. ABIVAX Socit Anonyme | Washington Mutual vs. SCOR PK |
| Eaton Vance vs. Europacific Growth Fund | Eaton Vance vs. Washington Mutual Investors | Eaton Vance vs. ABIVAX Socit Anonyme | Eaton Vance vs. SCOR PK |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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