Correlation Between Americafirst Tactical and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Americafirst Tactical 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 Americafirst Tactical and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Americafirst Tactical Alpha and Eaton Vance Tax, you can compare the effects of market volatilities on Americafirst Tactical 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 Americafirst Tactical with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Tactical and Eaton Vance.

Diversification Opportunities for Americafirst Tactical and Eaton Vance

0.67

Correlation Coefficient

Americafirst Tactical  Eaton Vance

Poor diversification

The 3 months correlation between Americafirst and Eaton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Tactical Alpha and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Americafirst Tactical 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 Americafirst Tactical Alpha 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 Tax has no effect on the direction of Americafirst Tactical i.e., Americafirst Tactical and Eaton Vance go up and down completely randomly.

Pair Corralation between Americafirst Tactical and Eaton Vance

Assuming the 90 days horizon Americafirst Tactical Alpha is expected to generate 2.32 times more return on investment than Eaton Vance. However, Americafirst Tactical is 2.32 times more volatile than Eaton Vance Tax. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.13 per unit of risk. If you would invest  1,484  in Americafirst Tactical Alpha on October 22, 2024 and sell it today you would earn a total of  106.00  from holding Americafirst Tactical Alpha or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Americafirst Tactical Alpha  vs.  Eaton Vance Tax

Americafirst Tactical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Tactical Alpha are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Americafirst Tactical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Eaton Vance Tax

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Americafirst Tactical and Eaton Vance

The main advantage of trading using opposite Americafirst Tactical and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Tactical 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.

The idea behind Americafirst Tactical Alpha and Eaton Vance Tax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.