Correlation Between State Street and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and Eaton Vance New, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Eaton Vance.
Diversification Opportunities for State Street and Eaton Vance
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Eaton is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Eaton Vance New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance New and State Street 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 State Street Corp 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 New has no effect on the direction of State Street i.e., State Street and Eaton Vance go up and down completely randomly.
Pair Corralation between State Street and Eaton Vance
Considering the 90-day investment horizon State Street Corp is expected to generate 1.93 times more return on investment than Eaton Vance. However, State Street is 1.93 times more volatile than Eaton Vance New. It trades about 0.22 of its potential returns per unit of risk. Eaton Vance New is currently generating about 0.33 per unit of risk. If you would invest 9,293 in State Street Corp on August 31, 2024 and sell it today you would earn a total of 586.00 from holding State Street Corp or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Eaton Vance New
Performance |
| Timeline |
| State Street Corp |
| Eaton Vance New |
State Street and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Eaton Vance
The main advantage of trading using opposite State Street and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
| Eaton Vance vs. Nuveen Amt Free Municipal | Eaton Vance vs. Nuveen Municipalome | Eaton Vance vs. Pimco New York | Eaton Vance vs. Blackrock Muniholdings Ny |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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