Correlation Between Eaton Vance and Alger Midcap

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

Diversification Opportunities for Eaton Vance and Alger Midcap

0.92

Correlation Coefficient

Eaton Vance  Alger Midcap

Almost no diversification

The 3 months correlation between Eaton and Alger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap 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 Tax are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Eaton Vance i.e., Eaton Vance and Alger Midcap go up and down completely randomly.

Pair Corralation between Eaton Vance and Alger Midcap

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.6 times more return on investment than Alger Midcap. However, Eaton Vance Tax is 1.68 times less risky than Alger Midcap. It trades about 0.14 of its potential returns per unit of risk. Alger Midcap Growth is currently generating about -0.16 per unit of risk. If you would invest  1,486  in Eaton Vance Tax on September 27, 2024 and sell it today you would earn a total of  35.00  from holding Eaton Vance Tax or generate 2.36% return on investment over 90 days.

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

Eaton Vance Tax  vs.  Alger Midcap Growth

Eaton Vance Tax

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alger Midcap Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Midcap Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Midcap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eaton Vance and Alger Midcap

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

The idea behind Eaton Vance Tax and Alger Midcap 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 Stocks Directory module to find actively traded stocks across global markets.