Correlation Between Eaton Vance and AdvisorShares Pure

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

Diversification Opportunities for Eaton Vance and AdvisorShares Pure

-0.85

Correlation Coefficient

Eaton Vance  AdvisorShares Pure

Pay attention - limited upside

The 3 months correlation between Eaton and AdvisorShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of Eaton Vance i.e., Eaton Vance and AdvisorShares Pure go up and down completely randomly.

Pair Corralation between Eaton Vance and AdvisorShares Pure

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.25 times more return on investment than AdvisorShares Pure. However, Eaton Vance Enhanced is 4.0 times less risky than AdvisorShares Pure. It trades about 0.28 of its potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about -0.14 per unit of risk. If you would invest  2,106  in Eaton Vance Enhanced on September 16, 2024 and sell it today you would earn a total of  306.00  from holding Eaton Vance Enhanced or generate 14.53% return on investment over 90 days.

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

Eaton Vance Enhanced  vs.  AdvisorShares Pure Cannabis

Eaton Vance Enhanced

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Eaton Vance unveiled solid returns over the last few months and may actually be approaching a breakup point.

AdvisorShares Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdvisorShares Pure Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Eaton Vance and AdvisorShares Pure

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

The idea behind Eaton Vance Enhanced and AdvisorShares Pure Cannabis 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.