Correlation Between Eaton Vance and Gabelli Global

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

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

Diversification Opportunities for Eaton Vance and Gabelli Global

0.65

Correlation Coefficient

Eaton Vance  Gabelli Global

Poor diversification

The 3 months correlation between Eaton and Gabelli is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Gabelli Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Small 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 Senior are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Small has no effect on the direction of Eaton Vance i.e., Eaton Vance and Gabelli Global go up and down completely randomly.

Pair Corralation between Eaton Vance and Gabelli Global

Considering the 90-day investment horizon Eaton Vance is expected to generate 3.69 times less return on investment than Gabelli Global. But when comparing it to its historical volatility, Eaton Vance Senior is 1.75 times less risky than Gabelli Global. It trades about 0.02 of its potential returns per unit of risk. Gabelli Global Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,115  in Gabelli Global Small on September 28, 2024 and sell it today you would earn a total of  64.00  from holding Gabelli Global Small or generate 5.74% return on investment over 90 days.

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

Eaton Vance Senior  vs.  Gabelli Global Small

Eaton Vance Senior

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Senior are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Gabelli Global Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Global Small has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Gabelli Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Gabelli Global

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

The idea behind Eaton Vance Senior and Gabelli Global Small 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.