Correlation Between Eaton Vance and Guinness Atkinson

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

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

Diversification Opportunities for Eaton Vance and Guinness Atkinson

0.69

Correlation Coefficient

Eaton Vance  Guinness Atkinson

Poor diversification

The 3 months correlation between Eaton and Guinness is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Greater and Guinness Atkinson China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson China 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 Greater are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson China has no effect on the direction of Eaton Vance i.e., Eaton Vance and Guinness Atkinson go up and down completely randomly.

Pair Corralation between Eaton Vance and Guinness Atkinson

Assuming the 90 days horizon Eaton Vance Greater is expected to generate 0.44 times more return on investment than Guinness Atkinson. However, Eaton Vance Greater is 2.28 times less risky than Guinness Atkinson. It trades about -0.17 of its potential returns per unit of risk. Guinness Atkinson China is currently generating about -0.16 per unit of risk. If you would invest  4,187  in Eaton Vance Greater on October 7, 2024 and sell it today you would lose (108.00) from holding Eaton Vance Greater or give up 2.58% of portfolio value over 90 days.

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

Eaton Vance Greater  vs.  Guinness Atkinson China

Eaton Vance Greater

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Greater has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Guinness Atkinson China

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guinness Atkinson China has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking signals remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Eaton Vance and Guinness Atkinson

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

The idea behind Eaton Vance Greater and Guinness Atkinson China 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.