Correlation Between Eaton Vance and Ab National

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

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

Diversification Opportunities for Eaton Vance and Ab National

0.67

Correlation Coefficient

Eaton Vance  Ab National

Poor diversification

The 3 months correlation between Eaton and ALTHX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Ab National Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab National Portfolio 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 National are associated (or correlated) with Ab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab National Portfolio has no effect on the direction of Eaton Vance i.e., Eaton Vance and Ab National go up and down completely randomly.

Pair Corralation between Eaton Vance and Ab National

Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Ab National. In addition to that, Eaton Vance is 3.02 times more volatile than Ab National Portfolio. It trades about -0.24 of its total potential returns per unit of risk. Ab National Portfolio is currently generating about -0.38 per unit of volatility. If you would invest  983.00  in Ab National Portfolio on October 7, 2024 and sell it today you would lose (18.00) from holding Ab National Portfolio or give up 1.83% of portfolio value over 90 days.

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

Eaton Vance National  vs.  Ab National Portfolio

Eaton Vance National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance National 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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Ab National Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab National Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Ab National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Ab National

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

The idea behind Eaton Vance National and Ab National Portfolio 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.