Correlation Between Vanguard Small-cap and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap 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 Small-cap 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 Small Cap Index and Eaton Vance Stock, you can compare the effects of market volatilities on Vanguard Small-cap 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 Small-cap with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Eaton Vance.
Diversification Opportunities for Vanguard Small-cap and Eaton Vance
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Eaton is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Eaton Vance Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Stock and Vanguard Small-cap 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 Small Cap Index 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 Stock has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Eaton Vance go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Eaton Vance
Assuming the 90 days horizon Vanguard Small Cap Index is expected to generate 1.32 times more return on investment than Eaton Vance. However, Vanguard Small-cap is 1.32 times more volatile than Eaton Vance Stock. It trades about 0.29 of its potential returns per unit of risk. Eaton Vance Stock is currently generating about 0.11 per unit of risk. If you would invest 11,455 in Vanguard Small Cap Index on August 27, 2024 and sell it today you would earn a total of 890.00 from holding Vanguard Small Cap Index or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. Eaton Vance Stock
Performance |
| Timeline |
| Vanguard Small Cap |
| Eaton Vance Stock |
Vanguard Small-cap and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Eaton Vance
The main advantage of trading using opposite Vanguard Small-cap and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap 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 Small-cap vs. Vanguard Mid Cap Index | Vanguard Small-cap vs. Vanguard Total Bond | Vanguard Small-cap vs. Vanguard Institutional Index | Vanguard Small-cap vs. Vanguard Total International |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |