Correlation Between Eaton Vance and Global Real

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

Diversification Opportunities for Eaton Vance and Global Real

-0.67

Correlation Coefficient

Eaton Vance  Global Real

Excellent diversification

The 3 months correlation between Eaton and Global is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Eaton Vance i.e., Eaton Vance and Global Real go up and down completely randomly.

Pair Corralation between Eaton Vance and Global Real

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.73 times more return on investment than Global Real. However, Eaton Vance Tax is 1.37 times less risky than Global Real. It trades about -0.02 of its potential returns per unit of risk. Global Real Estate is currently generating about -0.29 per unit of risk. If you would invest  1,430  in Eaton Vance Tax on October 6, 2024 and sell it today you would lose (6.00) from holding Eaton Vance Tax or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Eaton Vance Tax  vs.  Global Real Estate

Eaton Vance Tax

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Global Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Eaton Vance and Global Real

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

The idea behind Eaton Vance Tax and Global Real Estate 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.