Correlation Between Eaton Vance and VanEck Agribusiness

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

Diversification Opportunities for Eaton Vance and VanEck Agribusiness

-0.53

Correlation Coefficient

Eaton Vance  VanEck Agribusiness

Excellent diversification

The 3 months correlation between Eaton and VanEck is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and VanEck Agribusiness ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Agribusiness ETF 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 VanEck Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Agribusiness ETF has no effect on the direction of Eaton Vance i.e., Eaton Vance and VanEck Agribusiness go up and down completely randomly.

Pair Corralation between Eaton Vance and VanEck Agribusiness

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.08 times more return on investment than VanEck Agribusiness. However, Eaton Vance is 1.08 times more volatile than VanEck Agribusiness ETF. It trades about 0.11 of its potential returns per unit of risk. VanEck Agribusiness ETF is currently generating about -0.04 per unit of risk. If you would invest  1,420  in Eaton Vance Enhanced on October 9, 2024 and sell it today you would earn a total of  973.00  from holding Eaton Vance Enhanced or generate 68.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Eaton Vance Enhanced  vs.  VanEck Agribusiness ETF

Eaton Vance Enhanced

Risk-Adjusted Performance

13 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VanEck Agribusiness ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Agribusiness ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Eaton Vance and VanEck Agribusiness

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

The idea behind Eaton Vance Enhanced and VanEck Agribusiness ETF 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.