Correlation Between Eaton Vance and Parametric Tax

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

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

Diversification Opportunities for Eaton Vance and Parametric Tax

0.0

Correlation Coefficient

Eaton Vance  Parametric Tax

Pay attention - limited upside

The 3 months correlation between Eaton and Parametric is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax Managed and Parametric Tax Managed Interna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Tax Managed 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 Managed are associated (or correlated) with Parametric Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Tax Managed has no effect on the direction of Eaton Vance i.e., Eaton Vance and Parametric Tax go up and down completely randomly.

Pair Corralation between Eaton Vance and Parametric Tax

If you would invest (100.00) in Parametric Tax Managed International on December 5, 2024 and sell it today you would earn a total of  100.00  from holding Parametric Tax Managed International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eaton Vance Tax Managed  vs.  Parametric Tax Managed Interna

Eaton Vance Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Tax Managed 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.

Parametric Tax Managed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Parametric Tax Managed International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Parametric Tax 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 Parametric Tax

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

The idea behind Eaton Vance Tax Managed and Parametric Tax Managed International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.