Correlation Between Vanguard Gnma and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Vanguard Gnma 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 Vanguard Gnma and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Gnma Fund and Eaton Vance Government, you can compare the effects of market volatilities on Vanguard Gnma 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 Vanguard Gnma with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Gnma and Eaton Vance.
Diversification Opportunities for Vanguard Gnma and Eaton Vance
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Eaton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Gnma Fund and Eaton Vance Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Government and Vanguard Gnma 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 Vanguard Gnma Fund 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 Government has no effect on the direction of Vanguard Gnma i.e., Vanguard Gnma and Eaton Vance go up and down completely randomly.
Pair Corralation between Vanguard Gnma and Eaton Vance
Assuming the 90 days horizon Vanguard Gnma is expected to generate 1.18 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Vanguard Gnma Fund is 1.24 times less risky than Eaton Vance. It trades about 0.09 of its potential returns per unit of risk. Eaton Vance Government is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Eaton Vance Government on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Eaton Vance Government or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Gnma Fund vs. Eaton Vance Government
Performance |
| Timeline |
| Vanguard Gnma |
| Eaton Vance Government |
Vanguard Gnma and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Gnma and Eaton Vance
The main advantage of trading using opposite Vanguard Gnma and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Gnma 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.| Vanguard Gnma vs. Us Government Securities | Vanguard Gnma vs. Us Government Securities | Vanguard Gnma vs. Us Government Securities | Vanguard Gnma vs. American Funds Government |
| Eaton Vance vs. Vanguard Gnma Fund | Eaton Vance vs. Us Government Securities | Eaton Vance vs. Us Government Securities | Eaton Vance vs. Us Government Securities |
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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