Correlation Between Eaton Vance and Origin Emerging

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

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

Diversification Opportunities for Eaton Vance and Origin Emerging

0.26

Correlation Coefficient

Eaton Vance  Origin Emerging

Modest diversification

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

Pair Corralation between Eaton Vance and Origin Emerging

Assuming the 90 days horizon Eaton Vance is expected to generate 4.83 times less return on investment than Origin Emerging. But when comparing it to its historical volatility, Eaton Vance Msschsts is 2.78 times less risky than Origin Emerging. It trades about 0.06 of its potential returns per unit of risk. Origin Emerging Markets is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,033  in Origin Emerging Markets on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Origin Emerging Markets or generate 1.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.54%
Values	Daily Returns

Eaton Vance Msschsts  vs.  Origin Emerging Markets

Eaton Vance Msschsts

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Msschsts are ranked lower than 4 (%) 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.

Origin Emerging Markets

Risk-Adjusted Performance

OK

Over the last 90 days Origin Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Origin Emerging 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 Origin Emerging

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

The idea behind Eaton Vance Msschsts and Origin Emerging Markets 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.