Correlation Between Eaton Vance and Clarion Partners

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

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

Diversification Opportunities for Eaton Vance and Clarion Partners

0.71

Correlation Coefficient

Eaton Vance  Clarion Partners

Poor diversification

The 3 months correlation between Eaton and Clarion is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Emerging and Clarion Partners Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarion Partners Real and Eaton Vance 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 Eaton Vance Emerging are associated (or correlated) with Clarion Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarion Partners Real has no effect on the direction of Eaton Vance i.e., Eaton Vance and Clarion Partners go up and down completely randomly.

Pair Corralation between Eaton Vance and Clarion Partners

Assuming the 90 days horizon Eaton Vance Emerging is expected to generate 3.37 times more return on investment than Clarion Partners. However, Eaton Vance is 3.37 times more volatile than Clarion Partners Real. It trades about 0.18 of its potential returns per unit of risk. Clarion Partners Real is currently generating about 0.23 per unit of risk. If you would invest  777.00  in Eaton Vance Emerging on September 16, 2024 and sell it today you would earn a total of  18.00  from holding Eaton Vance Emerging or generate 2.32% return on investment over 90 days.

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

Eaton Vance Emerging  vs.  Clarion Partners Real

Eaton Vance Emerging

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Emerging are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. 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.

Clarion Partners Real

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clarion Partners Real are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Clarion Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Clarion Partners

The main advantage of trading using opposite Eaton Vance and Clarion Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Clarion Partners 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 Clarion Partners will offset losses from the drop in Clarion Partners' long position.

The idea behind Eaton Vance Emerging and Clarion Partners Real 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.