Correlation Between Eaton Vance and Soybean Meal

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

Diversification Opportunities for Eaton Vance and Soybean Meal

0.37

Correlation Coefficient

Eaton Vance  Soybean Meal

Weak diversification

The 3 months correlation between Eaton and Soybean is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Soybean Meal Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soybean Meal Futures 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 Soybean Meal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soybean Meal Futures has no effect on the direction of Eaton Vance i.e., Eaton Vance and Soybean Meal go up and down completely randomly.

Pair Corralation between Eaton Vance and Soybean Meal

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to under-perform the Soybean Meal. But the etf apears to be less risky and, when comparing its historical volatility, Eaton Vance Enhanced is 1.48 times less risky than Soybean Meal. The etf trades about -0.13 of its potential returns per unit of risk. The Soybean Meal Futures is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  31,180  in Soybean Meal Futures on December 28, 2024 and sell it today you would lose (1,730) from holding Soybean Meal Futures or give up 5.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Eaton Vance Enhanced  vs.  Soybean Meal Futures

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 latest conflicting performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Soybean Meal Futures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soybean Meal Futures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Soybean Meal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eaton Vance and Soybean Meal

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

The idea behind Eaton Vance Enhanced and Soybean Meal Futures 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.