Correlation Between Agriculture Natural and Eaton Vance

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

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

Diversification Opportunities for Agriculture Natural and Eaton Vance

0.58

Correlation Coefficient

Agriculture Natural  Eaton Vance

Very weak diversification

The 3 months correlation between Agriculture and Eaton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Agriculture Natural Solutions and Eaton Vance Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Floating and Agriculture Natural 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 Agriculture Natural Solutions 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 Floating has no effect on the direction of Agriculture Natural i.e., Agriculture Natural and Eaton Vance go up and down completely randomly.

Pair Corralation between Agriculture Natural and Eaton Vance

Assuming the 90 days horizon Agriculture Natural Solutions is expected to generate 22.73 times more return on investment than Eaton Vance. However, Agriculture Natural is 22.73 times more volatile than Eaton Vance Floating. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Floating is currently generating about 0.19 per unit of risk. If you would invest  17.00  in Agriculture Natural Solutions on September 3, 2024 and sell it today you would earn a total of  8.00  from holding Agriculture Natural Solutions or generate 47.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	79.69%
Values	Daily Returns

Agriculture Natural Solutions  vs.  Eaton Vance Floating

Agriculture Natural

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agriculture Natural Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Agriculture Natural showed solid returns over the last few months and may actually be approaching a breakup point.

Eaton Vance Floating

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Agriculture Natural and Eaton Vance

The main advantage of trading using opposite Agriculture Natural and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agriculture Natural 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 Agriculture Natural Solutions and Eaton Vance Floating 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.