Correlation Between Westwood Holdings and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Westwood Holdings 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 Westwood Holdings and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Holdings Group and Eaton Vance National, you can compare the effects of market volatilities on Westwood Holdings 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 Westwood Holdings with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Holdings and Eaton Vance.
Diversification Opportunities for Westwood Holdings and Eaton Vance
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westwood and Eaton is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Holdings Group and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and Westwood Holdings 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 Westwood Holdings Group 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 National has no effect on the direction of Westwood Holdings i.e., Westwood Holdings and Eaton Vance go up and down completely randomly.
Pair Corralation between Westwood Holdings and Eaton Vance
Considering the 90-day investment horizon Westwood Holdings Group is expected to generate 3.11 times more return on investment than Eaton Vance. However, Westwood Holdings is 3.11 times more volatile than Eaton Vance National. It trades about 0.04 of its potential returns per unit of risk. Eaton Vance National is currently generating about 0.02 per unit of risk. If you would invest 1,049 in Westwood Holdings Group on September 2, 2024 and sell it today you would earn a total of 531.00 from holding Westwood Holdings Group or generate 50.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Holdings Group vs. Eaton Vance National
Performance |
| Timeline |
| Westwood Holdings |
| Eaton Vance National |
Westwood Holdings and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Holdings and Eaton Vance
The main advantage of trading using opposite Westwood Holdings and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Holdings 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.| Westwood Holdings vs. MFS Investment Grade | Westwood Holdings vs. Eaton Vance National | Westwood Holdings vs. Invesco Trust For | Westwood Holdings vs. Invesco California Value |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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