Correlation Between Eaton Vance and IShares Global

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

Diversification Opportunities for Eaton Vance and IShares Global

0.3

Correlation Coefficient

Eaton Vance  IShares Global

Weak diversification

The 3 months correlation between Eaton and IShares is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Eaton Vance i.e., Eaton Vance and IShares Global go up and down completely randomly.

Pair Corralation between Eaton Vance and IShares Global

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to under-perform the IShares Global. In addition to that, Eaton Vance is 1.15 times more volatile than iShares Global Timber. It trades about -0.07 of its total potential returns per unit of risk. iShares Global Timber is currently generating about 0.08 per unit of volatility. If you would invest  7,487  in iShares Global Timber on December 19, 2024 and sell it today you would earn a total of  366.00  from holding iShares Global Timber or generate 4.89% 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 Enhanced  vs.  iShares Global Timber

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.

iShares Global Timber

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Timber are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares Global is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eaton Vance and IShares Global

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

The idea behind Eaton Vance Enhanced and iShares Global Timber 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.