Correlation Between Eaton Vance and Artisan Select

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

By analyzing existing cross correlation between Eaton Vance Large Cap and Artisan Select Equity, you can compare the effects of market volatilities on Eaton Vance and Artisan Select 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 Artisan Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Artisan Select.

Diversification Opportunities for Eaton Vance and Artisan Select

0.8

Correlation Coefficient

Eaton Vance  Artisan Select

Very poor diversification

The 3 months correlation between Eaton and Artisan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Large Cap and Artisan Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Select Equity 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 Large Cap are associated (or correlated) with Artisan Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Select Equity has no effect on the direction of Eaton Vance i.e., Eaton Vance and Artisan Select go up and down completely randomly.

Pair Corralation between Eaton Vance and Artisan Select

Assuming the 90 days horizon Eaton Vance is expected to generate 2.41 times less return on investment than Artisan Select. But when comparing it to its historical volatility, Eaton Vance Large Cap is 1.01 times less risky than Artisan Select. It trades about 0.04 of its potential returns per unit of risk. Artisan Select Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,133  in Artisan Select Equity on October 10, 2024 and sell it today you would earn a total of  412.00  from holding Artisan Select Equity or generate 36.36% return on investment over 90 days.

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

Eaton Vance Large Cap  vs.  Artisan Select Equity

Eaton Vance Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Large Cap 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.

Artisan Select Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Select Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Select 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 Artisan Select

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

The idea behind Eaton Vance Large Cap and Artisan Select Equity 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.