Correlation Between Eaton Vance and Clough Global

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

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

Diversification Opportunities for Eaton Vance and Clough Global

0.67

Correlation Coefficient

Eaton Vance  Clough Global

Poor diversification

The 3 months correlation between Eaton and Clough is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax Managed and Clough Global Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Ef 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 Managed are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Ef has no effect on the direction of Eaton Vance i.e., Eaton Vance and Clough Global go up and down completely randomly.

Pair Corralation between Eaton Vance and Clough Global

Considering the 90-day investment horizon Eaton Vance Tax Managed is expected to generate 0.84 times more return on investment than Clough Global. However, Eaton Vance Tax Managed is 1.19 times less risky than Clough Global. It trades about 0.06 of its potential returns per unit of risk. Clough Global Ef is currently generating about -0.02 per unit of risk. If you would invest  805.00  in Eaton Vance Tax Managed on December 27, 2024 and sell it today you would earn a total of  22.00  from holding Eaton Vance Tax Managed or generate 2.73% 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 Managed  vs.  Clough Global Ef

Eaton Vance Tax

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax Managed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Clough Global Ef

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Ef has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable essential indicators, Clough Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eaton Vance and Clough Global

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

The idea behind Eaton Vance Tax Managed and Clough Global Ef 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.