Correlation Between Eaton Vance and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Dow Jones 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 Eaton Vance and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance California and Dow Jones Industrial, you can compare the effects of market volatilities on Eaton Vance and Dow Jones 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 Eaton Vance with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Dow Jones.
Diversification Opportunities for Eaton Vance and Dow Jones
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance California and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Eaton Vance 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 Eaton Vance California are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Eaton Vance i.e., Eaton Vance and Dow Jones go up and down completely randomly.
Pair Corralation between Eaton Vance and Dow Jones
Assuming the 90 days horizon Eaton Vance California is expected to under-perform the Dow Jones. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eaton Vance California is 2.2 times less risky than Dow Jones. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,815,030 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 658,627 from holding Dow Jones Industrial or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Eaton Vance California vs. Dow Jones Industrial
Performance |
| Timeline |
Eaton Vance and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eaton Vance California
Pair trading matchups for Eaton Vance
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eaton Vance and Dow Jones
The main advantage of trading using opposite Eaton Vance and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Eaton Vance vs. Jp Morgan Smartretirement | Eaton Vance vs. Hartford Moderate Allocation | Eaton Vance vs. Tiaa Cref Lifecycle Retirement | Eaton Vance vs. Fidelity Managed Retirement |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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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