Correlation Between Us Government and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Eaton Vance Multi Strategy, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Eaton Vance.
Diversification Opportunities for Us Government and Eaton Vance
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USGFX and Eaton is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Eaton Vance Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Multi and Us Government 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 Us Government Securities 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 Multi has no effect on the direction of Us Government i.e., Us Government and Eaton Vance go up and down completely randomly.
Pair Corralation between Us Government and Eaton Vance
Assuming the 90 days horizon Us Government Securities is expected to generate 4.16 times more return on investment than Eaton Vance. However, Us Government is 4.16 times more volatile than Eaton Vance Multi Strategy. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Multi Strategy is currently generating about 0.2 per unit of risk. If you would invest 1,185 in Us Government Securities on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Us Government Securities or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Eaton Vance Multi Strategy
Performance |
| Timeline |
| Us Government Securities |
| Eaton Vance Multi |
Us Government and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Eaton Vance
The main advantage of trading using opposite Us Government and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Small Cap Stock | Us Government vs. Sentinel Small Pany | Us Government vs. Aqr Diversified Arbitrage | Us Government vs. Lord Abbett Diversified |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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