Correlation Between Eaton Vance and Huber Capital

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

By analyzing existing cross correlation between Eaton Vance Floating Rate and Huber Capital Diversified, you can compare the effects of market volatilities on Eaton Vance and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Huber Capital.

Diversification Opportunities for Eaton Vance and Huber Capital

0.78

Correlation Coefficient

Eaton Vance  Huber Capital

Poor diversification

The 3 months correlation between Eaton and Huber is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Huber Capital Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Diversified 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 Floating Rate are associated (or correlated) with Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Diversified has no effect on the direction of Eaton Vance i.e., Eaton Vance and Huber Capital go up and down completely randomly.

Pair Corralation between Eaton Vance and Huber Capital

Assuming the 90 days horizon Eaton Vance is expected to generate 3.05 times less return on investment than Huber Capital. But when comparing it to its historical volatility, Eaton Vance Floating Rate is 6.67 times less risky than Huber Capital. It trades about 0.24 of its potential returns per unit of risk. Huber Capital Diversified is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,349  in Huber Capital Diversified on September 18, 2024 and sell it today you would earn a total of  136.00  from holding Huber Capital Diversified or generate 5.79% return on investment over 90 days.

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

Eaton Vance Floating Rate  vs.  Huber Capital Diversified

Eaton Vance Floating

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 18 (%) 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.

Huber Capital Diversified

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Huber Capital Diversified are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Huber Capital 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 Huber Capital

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

The idea behind Eaton Vance Floating Rate and Huber Capital Diversified 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.