Correlation Between Eaton Vance and Hanlon Tactical

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

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

Diversification Opportunities for Eaton Vance and Hanlon Tactical

0.88

Correlation Coefficient

Eaton Vance  Hanlon Tactical

Very poor diversification

The 3 months correlation between Eaton and Hanlon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Risk and Hanlon Tactical Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanlon Tactical Dividend 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 Risk are associated (or correlated) with Hanlon Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanlon Tactical Dividend has no effect on the direction of Eaton Vance i.e., Eaton Vance and Hanlon Tactical go up and down completely randomly.

Pair Corralation between Eaton Vance and Hanlon Tactical

Considering the 90-day investment horizon Eaton Vance Risk is expected to under-perform the Hanlon Tactical. But the fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Risk is 1.17 times less risky than Hanlon Tactical. The fund trades about -0.1 of its potential returns per unit of risk. The Hanlon Tactical Dividend is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,312  in Hanlon Tactical Dividend on December 20, 2024 and sell it today you would lose (46.00) from holding Hanlon Tactical Dividend or give up 3.51% of portfolio value over 90 days.

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

Eaton Vance Risk  vs.  Hanlon Tactical Dividend

Eaton Vance Risk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Risk has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Hanlon Tactical Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanlon Tactical Dividend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hanlon Tactical 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 Hanlon Tactical

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

The idea behind Eaton Vance Risk and Hanlon Tactical Dividend 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.