Correlation Between Eaton Vance and Alps/kotak India

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

Diversification Opportunities for Eaton Vance and Alps/kotak India

0.93

Correlation Coefficient

Eaton Vance  Alps/kotak India

Almost no diversification

The 3 months correlation between Eaton and Alps/kotak is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Greater and Alpskotak India Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpskotak India Growth 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 Alps/kotak India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpskotak India Growth has no effect on the direction of Eaton Vance i.e., Eaton Vance and Alps/kotak India go up and down completely randomly.

Pair Corralation between Eaton Vance and Alps/kotak India

Assuming the 90 days horizon Eaton Vance Greater is expected to under-perform the Alps/kotak India. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Greater is 1.08 times less risky than Alps/kotak India. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Alpskotak India Growth is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,984  in Alpskotak India Growth on September 5, 2024 and sell it today you would lose (3.00) from holding Alpskotak India Growth or give up 0.15% of portfolio value over 90 days.

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

Eaton Vance Greater  vs.  Alpskotak India Growth

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 fairly strong forward indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alpskotak India Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpskotak India Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alps/kotak India 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 Alps/kotak India

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

The idea behind Eaton Vance Greater and Alpskotak India Growth 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.