Correlation Between Eaton Vance and Aberdeen Asia

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

Diversification Opportunities for Eaton Vance and Aberdeen Asia

-0.11

Correlation Coefficient

Eaton Vance  Aberdeen Asia

Good diversification

The 3 months correlation between Eaton and Aberdeen is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Aberdeen Asia Pacificome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Asia Pacificome 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 Aberdeen Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Asia Pacificome has no effect on the direction of Eaton Vance i.e., Eaton Vance and Aberdeen Asia go up and down completely randomly.

Pair Corralation between Eaton Vance and Aberdeen Asia

Considering the 90-day investment horizon Eaton Vance Tax is expected to under-perform the Aberdeen Asia. In addition to that, Eaton Vance is 2.93 times more volatile than Aberdeen Asia Pacificome. It trades about -0.36 of its total potential returns per unit of risk. Aberdeen Asia Pacificome is currently generating about 0.18 per unit of volatility. If you would invest  1,680  in Aberdeen Asia Pacificome on December 10, 2024 and sell it today you would earn a total of  17.00  from holding Aberdeen Asia Pacificome or generate 1.01% return on investment over 90 days.

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

Eaton Vance Tax  vs.  Aberdeen Asia Pacificome

Eaton Vance Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Tax has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Aberdeen Asia Pacificome

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Eaton Vance Tax and Aberdeen Asia Pacificome 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 Stocks Directory module to find actively traded stocks across global markets.