Correlation Between Eaton Vance and Ridgeworth Ceredex

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

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

Diversification Opportunities for Eaton Vance and Ridgeworth Ceredex

0.26

Correlation Coefficient

Eaton Vance  Ridgeworth Ceredex

Modest diversification

The 3 months correlation between Eaton and Ridgeworth is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Income and Ridgeworth Ceredex Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Ceredex Mid 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 Income are associated (or correlated) with Ridgeworth Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Ceredex Mid has no effect on the direction of Eaton Vance i.e., Eaton Vance and Ridgeworth Ceredex go up and down completely randomly.

Pair Corralation between Eaton Vance and Ridgeworth Ceredex

Assuming the 90 days horizon Eaton Vance is expected to generate 1.08 times less return on investment than Ridgeworth Ceredex. But when comparing it to its historical volatility, Eaton Vance Income is 3.72 times less risky than Ridgeworth Ceredex. It trades about 0.11 of its potential returns per unit of risk. Ridgeworth Ceredex Mid Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,111  in Ridgeworth Ceredex Mid Cap on October 26, 2024 and sell it today you would earn a total of  166.00  from holding Ridgeworth Ceredex Mid Cap or generate 14.94% return on investment over 90 days.

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

Eaton Vance Income  vs.  Ridgeworth Ceredex Mid Cap

Eaton Vance Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ridgeworth Ceredex Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ridgeworth Ceredex Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ridgeworth Ceredex 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 Ridgeworth Ceredex

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

The idea behind Eaton Vance Income and Ridgeworth Ceredex Mid Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.