Correlation Between Eaton Vance and Intermediate Government

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

By analyzing existing cross correlation between Eaton Vance Val and Intermediate Government Bond, you can compare the effects of market volatilities on Eaton Vance and Intermediate Government 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 Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Intermediate Government.

Diversification Opportunities for Eaton Vance and Intermediate Government

-0.28

Correlation Coefficient

Eaton Vance  Intermediate Government

Very good diversification

The 3 months correlation between Eaton and Intermediate is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Val and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government 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 Val are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Eaton Vance i.e., Eaton Vance and Intermediate Government go up and down completely randomly.

Pair Corralation between Eaton Vance and Intermediate Government

Assuming the 90 days horizon Eaton Vance Val is expected to under-perform the Intermediate Government. In addition to that, Eaton Vance is 7.13 times more volatile than Intermediate Government Bond. It trades about -0.03 of its total potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.25 per unit of volatility. If you would invest  936.00  in Intermediate Government Bond on December 22, 2024 and sell it today you would earn a total of  15.00  from holding Intermediate Government Bond or generate 1.6% return on investment over 90 days.

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

Eaton Vance Val  vs.  Intermediate Government Bond

Eaton Vance Val

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Val has generated negative risk-adjusted returns adding no value to fund investors. 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.

Intermediate Government

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Government Bond are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Intermediate Government 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 Intermediate Government

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

The idea behind Eaton Vance Val and Intermediate Government Bond 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.