Correlation Between Eaton Vance and Alliancebernstein

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

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

Diversification Opportunities for Eaton Vance and Alliancebernstein

0.53

Correlation Coefficient

Eaton Vance  Alliancebernstein

Very weak diversification

The 3 months correlation between Eaton and Alliancebernstein is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Balanced and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Balanced are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Eaton Vance i.e., Eaton Vance and Alliancebernstein go up and down completely randomly.

Pair Corralation between Eaton Vance and Alliancebernstein

Assuming the 90 days horizon Eaton Vance Balanced is expected to under-perform the Alliancebernstein. In addition to that, Eaton Vance is 2.39 times more volatile than Alliancebernstein Global High. It trades about -0.27 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.05 per unit of volatility. If you would invest  1,082  in Alliancebernstein Global High on October 8, 2024 and sell it today you would lose (6.00) from holding Alliancebernstein Global High or give up 0.55% of portfolio value over 90 days.

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

Eaton Vance Balanced  vs.  Alliancebernstein Global High

Eaton Vance Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eaton Vance and Alliancebernstein

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

The idea behind Eaton Vance Balanced and Alliancebernstein Global High 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 Transaction History module to view history of all your transactions and understand their impact on performance.