Correlation Between Astar and Eaton Vance

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

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

Diversification Opportunities for Astar and Eaton Vance

0.52

Correlation Coefficient

Astar  Eaton Vance

Very weak diversification

The 3 months correlation between Astar and Eaton is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Astar 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 Astar 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 Astar 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 Astar i.e., Astar and Eaton Vance go up and down completely randomly.

Pair Corralation between Astar and Eaton Vance

Assuming the 90 days trading horizon Astar is expected to generate 16.62 times more return on investment than Eaton Vance. However, Astar is 16.62 times more volatile than Eaton Vance High. It trades about -0.01 of its potential returns per unit of risk. Eaton Vance High is currently generating about -0.36 per unit of risk. If you would invest  6.98  in Astar on October 9, 2024 and sell it today you would lose (0.25) from holding Astar or give up 3.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Astar  vs.  Eaton Vance High

Astar

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar 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 Astar and Eaton Vance

The main advantage of trading using opposite Astar and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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 Astar 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.