Correlation Between Brightsphere Investment and Eaton Vance

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

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

Diversification Opportunities for Brightsphere Investment and Eaton Vance

0.39

Correlation Coefficient

Brightsphere Investment  Eaton Vance

Weak diversification

The 3 months correlation between Brightsphere and Eaton is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group 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 Brightsphere Investment 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 Brightsphere Investment Group 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 Brightsphere Investment i.e., Brightsphere Investment and Eaton Vance go up and down completely randomly.

Pair Corralation between Brightsphere Investment and Eaton Vance

Given the investment horizon of 90 days Brightsphere Investment Group is expected to under-perform the Eaton Vance. In addition to that, Brightsphere Investment is 2.35 times more volatile than Eaton Vance Tax. It trades about -0.53 of its total potential returns per unit of risk. Eaton Vance Tax is currently generating about -0.11 per unit of volatility. If you would invest  857.00  in Eaton Vance Tax on October 10, 2024 and sell it today you would lose (14.00) from holding Eaton Vance Tax or give up 1.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.95%
Values	Daily Returns

Brightsphere Investment Group  vs.  Eaton Vance Tax

Brightsphere Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brightsphere Investment Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Brightsphere Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Eaton Vance Tax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brightsphere Investment and Eaton Vance

The main advantage of trading using opposite Brightsphere Investment and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightsphere Investment 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 Brightsphere Investment Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.