Correlation Between Eaton Vance and FAM

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

Diversification Opportunities for Eaton Vance and FAM

0.0

Correlation Coefficient

Eaton Vance  FAM

Pay attention - limited upside

The 3 months correlation between Eaton and FAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM 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 FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Eaton Vance i.e., Eaton Vance and FAM go up and down completely randomly.

Pair Corralation between Eaton Vance and FAM

If you would invest  1,650  in Eaton Vance National on December 26, 2024 and sell it today you would earn a total of  15.00  from holding Eaton Vance National or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eaton Vance National  vs.  FAM

Eaton Vance National

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance National are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

FAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days FAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, FAM is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and FAM

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

The idea behind Eaton Vance National and FAM 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.