Correlation Between Cornerstone Strategic and Eaton Vance

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

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

Diversification Opportunities for Cornerstone Strategic and Eaton Vance

0.22

Correlation Coefficient

Cornerstone Strategic  Eaton Vance

Modest diversification

The 3 months correlation between Cornerstone and Eaton is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Enhanced and Cornerstone Strategic 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 Cornerstone Strategic Value 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 Enhanced has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Eaton Vance go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Eaton Vance

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to under-perform the Eaton Vance. In addition to that, Cornerstone Strategic is 2.11 times more volatile than Eaton Vance Enhanced. It trades about -0.08 of its total potential returns per unit of risk. Eaton Vance Enhanced is currently generating about -0.04 per unit of volatility. If you would invest  2,048  in Eaton Vance Enhanced on December 2, 2024 and sell it today you would lose (31.00) from holding Eaton Vance Enhanced or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cornerstone Strategic Value  vs.  Eaton Vance Enhanced

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Eaton Vance Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cornerstone Strategic and Eaton Vance

The main advantage of trading using opposite Cornerstone Strategic and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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 Cornerstone Strategic Value and Eaton Vance Enhanced 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.