Correlation Between Eaton Vance and Delaware Value

Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Delaware Value 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 Delaware Value 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 Delaware Value Fund, you can compare the effects of market volatilities on Eaton Vance and Delaware Value 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 Delaware Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Delaware Value.

Diversification Opportunities for Eaton Vance and Delaware Value

0.69

Correlation Coefficient

Eaton Vance  Delaware Value

Poor diversification

The 3 months correlation between Eaton and Delaware is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Large Cap and Delaware Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Value 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 Delaware Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Value has no effect on the direction of Eaton Vance i.e., Eaton Vance and Delaware Value go up and down completely randomly.

Pair Corralation between Eaton Vance and Delaware Value

Assuming the 90 days horizon Eaton Vance Large Cap is expected to under-perform the Delaware Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Large Cap is 1.11 times less risky than Delaware Value. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Delaware Value Fund is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,386  in Delaware Value Fund on December 4, 2024 and sell it today you would lose (12.00) from holding Delaware Value Fund or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Eaton Vance Large Cap  vs.  Delaware Value Fund

Eaton Vance Large

Risk-Adjusted Performance

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Delaware Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delaware Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Eaton Vance and Delaware Value

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

The idea behind Eaton Vance Large Cap and Delaware Value Fund 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.