Correlation Between Cardano and Eaton Vance

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

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

Diversification Opportunities for Cardano and Eaton Vance

0.09

Correlation Coefficient

Cardano  Eaton Vance

Significant diversification

The 3 months correlation between Cardano and Eaton is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Eaton Vance High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance High and Cardano 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 Cardano 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 High has no effect on the direction of Cardano i.e., Cardano and Eaton Vance go up and down completely randomly.

Pair Corralation between Cardano and Eaton Vance

Assuming the 90 days trading horizon Cardano is expected to generate 21.11 times more return on investment than Eaton Vance. However, Cardano is 21.11 times more volatile than Eaton Vance High. It trades about 0.29 of its potential returns per unit of risk. Eaton Vance High is currently generating about -0.06 per unit of risk. If you would invest  34.00  in Cardano on October 9, 2024 and sell it today you would earn a total of  75.00  from holding Cardano or generate 220.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Cardano  vs.  Eaton Vance High

Cardano

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Eaton Vance High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance High has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and Eaton Vance

The main advantage of trading using opposite Cardano and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano 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 Cardano and Eaton Vance High 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.