Correlation Between Strategic Allocation and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation 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 Strategic Allocation and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Aggressive and Eaton Vance Balanced, you can compare the effects of market volatilities on Strategic Allocation 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 Strategic Allocation with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Eaton Vance.
Diversification Opportunities for Strategic Allocation and Eaton Vance
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strategic and Eaton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Aggressiv and Eaton Vance Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Balanced and Strategic Allocation 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 Strategic Allocation Aggressive 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 Balanced has no effect on the direction of Strategic Allocation i.e., Strategic Allocation and Eaton Vance go up and down completely randomly.
Pair Corralation between Strategic Allocation and Eaton Vance
Assuming the 90 days horizon Strategic Allocation Aggressive is expected to generate 0.38 times more return on investment than Eaton Vance. However, Strategic Allocation Aggressive is 2.6 times less risky than Eaton Vance. It trades about 0.07 of its potential returns per unit of risk. Eaton Vance Balanced is currently generating about -0.16 per unit of risk. If you would invest 864.00 in Strategic Allocation Aggressive on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Strategic Allocation Aggressive or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strategic Allocation Aggressiv vs. Eaton Vance Balanced
Performance |
| Timeline |
| Strategic Allocation |
| Eaton Vance Balanced |
Strategic Allocation and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation and Eaton Vance
The main advantage of trading using opposite Strategic Allocation and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation 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 Strategic Allocation Aggressive and Eaton Vance Balanced 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. Strategic Allocation Servative | Eaton Vance vs. Strategic Allocation Aggressive | Eaton Vance vs. Value Fund Investor | Eaton Vance vs. International Growth Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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