Correlation Between Eaton Vance and Global X

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

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

Diversification Opportunities for Eaton Vance and Global X

0.16

Correlation Coefficient

Eaton Vance  Global X

Average diversification

The 3 months correlation between Eaton and Global is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Global X Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Copper 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 Enhanced are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Copper has no effect on the direction of Eaton Vance i.e., Eaton Vance and Global X go up and down completely randomly.

Pair Corralation between Eaton Vance and Global X

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Eaton Vance Enhanced is 1.68 times less risky than Global X. The etf trades about -0.06 of its potential returns per unit of risk. The Global X Copper is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,769  in Global X Copper on December 18, 2024 and sell it today you would earn a total of  448.00  from holding Global X Copper or generate 11.89% return on investment over 90 days.

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

Eaton Vance Enhanced  vs.  Global X Copper

Eaton Vance Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Global X Copper

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Copper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Global X showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eaton Vance and Global X

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

The idea behind Eaton Vance Enhanced and Global X Copper 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.