Correlation Between Eaton Vance and Sprott Focus

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

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

Diversification Opportunities for Eaton Vance and Sprott Focus

0.52

Correlation Coefficient

Eaton Vance  Sprott Focus

Very weak diversification

The 3 months correlation between Eaton and Sprott is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust 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 Tax are associated (or correlated) with Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Eaton Vance i.e., Eaton Vance and Sprott Focus go up and down completely randomly.

Pair Corralation between Eaton Vance and Sprott Focus

Considering the 90-day investment horizon Eaton Vance Tax is expected to under-perform the Sprott Focus. But the etf apears to be less risky and, when comparing its historical volatility, Eaton Vance Tax is 1.05 times less risky than Sprott Focus. The etf trades about -0.13 of its potential returns per unit of risk. The Sprott Focus Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  712.00  in Sprott Focus Trust on December 28, 2024 and sell it today you would earn a total of  28.00  from holding Sprott Focus Trust or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Eaton Vance Tax  vs.  Sprott Focus Trust

Eaton Vance Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Tax has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Sprott Focus Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sprott Focus is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eaton Vance and Sprott Focus

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

The idea behind Eaton Vance Tax and Sprott Focus Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.