Correlation Between Absolute Strategies and Eaton Vance

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

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

Diversification Opportunities for Absolute Strategies and Eaton Vance

0.08

Correlation Coefficient

Absolute Strategies  Eaton Vance

Significant diversification

The 3 months correlation between Absolute and Eaton is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Strategies Fund and Eaton Vance Missouri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Missouri and Absolute Strategies 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 Absolute Strategies Fund 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 Missouri has no effect on the direction of Absolute Strategies i.e., Absolute Strategies and Eaton Vance go up and down completely randomly.

Pair Corralation between Absolute Strategies and Eaton Vance

Assuming the 90 days horizon Absolute Strategies Fund is expected to under-perform the Eaton Vance. In addition to that, Absolute Strategies is 1.91 times more volatile than Eaton Vance Missouri. It trades about -0.09 of its total potential returns per unit of risk. Eaton Vance Missouri is currently generating about 0.04 per unit of volatility. If you would invest  817.00  in Eaton Vance Missouri on September 26, 2024 and sell it today you would earn a total of  41.00  from holding Eaton Vance Missouri or generate 5.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.94%
Values	Daily Returns

Absolute Strategies Fund  vs.  Eaton Vance Missouri

Absolute Strategies

Risk-Adjusted Performance

0 of 100

Insignificant

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

Eaton Vance Missouri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Missouri 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 Absolute Strategies and Eaton Vance

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