Correlation Between Calvert Equity and Eaton Vance

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

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

Diversification Opportunities for Calvert Equity and Eaton Vance

0.9

Correlation Coefficient

Calvert Equity  Eaton Vance

Almost no diversification

The 3 months correlation between Calvert and Eaton is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Equity Portfolio and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta and Calvert Equity 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 Calvert Equity Portfolio 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 Atlanta has no effect on the direction of Calvert Equity i.e., Calvert Equity and Eaton Vance go up and down completely randomly.

Pair Corralation between Calvert Equity and Eaton Vance

Assuming the 90 days horizon Calvert Equity Portfolio is expected to under-perform the Eaton Vance. In addition to that, Calvert Equity is 1.56 times more volatile than Eaton Vance Atlanta. It trades about -0.12 of its total potential returns per unit of risk. Eaton Vance Atlanta is currently generating about -0.08 per unit of volatility. If you would invest  2,214  in Eaton Vance Atlanta on September 26, 2024 and sell it today you would lose (91.00) from holding Eaton Vance Atlanta or give up 4.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Calvert Equity Portfolio  vs.  Eaton Vance Atlanta

Calvert Equity Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Equity Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Eaton Vance Atlanta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Atlanta has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential 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 Calvert Equity and Eaton Vance

The main advantage of trading using opposite Calvert Equity and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Equity 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 Calvert Equity Portfolio and Eaton Vance Atlanta 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.