Correlation Between Eaton Vance and Advent Claymore

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

Diversification Opportunities for Eaton Vance and Advent Claymore

0.71

Correlation Coefficient

Eaton Vance  Advent Claymore

Poor diversification

The 3 months correlation between Eaton and Advent is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv 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 Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Eaton Vance i.e., Eaton Vance and Advent Claymore go up and down completely randomly.

Pair Corralation between Eaton Vance and Advent Claymore

Considering the 90-day investment horizon Eaton Vance is expected to generate 6.0 times less return on investment than Advent Claymore. But when comparing it to its historical volatility, Eaton Vance Tax is 1.06 times less risky than Advent Claymore. It trades about 0.04 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,101  in Advent Claymore Convertible on September 26, 2024 and sell it today you would earn a total of  94.00  from holding Advent Claymore Convertible or generate 8.54% return on investment over 90 days.

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

Eaton Vance Tax  vs.  Advent Claymore Convertible

Eaton Vance Tax

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Advent Claymore Conv

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Eaton Vance and Advent Claymore

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

The idea behind Eaton Vance Tax and Advent Claymore Convertible 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.