Correlation Between Eaton Vance and Mexico Equity

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

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

Diversification Opportunities for Eaton Vance and Mexico Equity

0.82

Correlation Coefficient

Eaton Vance  Mexico Equity

Very poor diversification

The 3 months correlation between Eaton and Mexico is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And 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 Municipal are associated (or correlated) with Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Eaton Vance i.e., Eaton Vance and Mexico Equity go up and down completely randomly.

Pair Corralation between Eaton Vance and Mexico Equity

Considering the 90-day investment horizon Eaton Vance is expected to generate 2.17 times less return on investment than Mexico Equity. But when comparing it to its historical volatility, Eaton Vance Municipal is 1.68 times less risky than Mexico Equity. It trades about 0.09 of its potential returns per unit of risk. Mexico Equity And is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  819.00  in Mexico Equity And on December 27, 2024 and sell it today you would earn a total of  67.00  from holding Mexico Equity And or generate 8.18% return on investment over 90 days.

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

Eaton Vance Municipal  vs.  Mexico Equity And

Eaton Vance Municipal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Municipal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Mexico Equity And

Risk-Adjusted Performance

OK

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

Pair Trading with Eaton Vance and Mexico Equity

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

The idea behind Eaton Vance Municipal and Mexico Equity And 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.