Correlation Between Eaton Vance and Via Renewables

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

Diversification Opportunities for Eaton Vance and Via Renewables

-0.52

Correlation Coefficient

Eaton Vance  Via Renewables

Excellent diversification

The 3 months correlation between Eaton and Via is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Eaton Vance i.e., Eaton Vance and Via Renewables go up and down completely randomly.

Pair Corralation between Eaton Vance and Via Renewables

Considering the 90-day investment horizon Eaton Vance Municipal is expected to generate 0.28 times more return on investment than Via Renewables. However, Eaton Vance Municipal is 3.61 times less risky than Via Renewables. It trades about 0.13 of its potential returns per unit of risk. Via Renewables is currently generating about 0.02 per unit of risk. If you would invest  982.00  in Eaton Vance Municipal on September 3, 2024 and sell it today you would earn a total of  93.00  from holding Eaton Vance Municipal or generate 9.47% return on investment over 90 days.

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

Eaton Vance Municipal  vs.  Via Renewables

Eaton Vance Municipal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Municipal are ranked lower than 3 (%) 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.

Via Renewables

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eaton Vance and Via Renewables

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

The idea behind Eaton Vance Municipal and Via Renewables 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .