Correlation Between FirstCash and Eaton Vance

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

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

Diversification Opportunities for FirstCash and Eaton Vance

-0.71

Correlation Coefficient

FirstCash  Eaton Vance

Pay attention - limited upside

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

Pair Corralation between FirstCash and Eaton Vance

Given the investment horizon of 90 days FirstCash is expected to generate 2.02 times less return on investment than Eaton Vance. In addition to that, FirstCash is 2.45 times more volatile than Eaton Vance Senior. It trades about 0.03 of its total potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.13 per unit of volatility. If you would invest  949.00  in Eaton Vance Senior on September 14, 2024 and sell it today you would earn a total of  356.00  from holding Eaton Vance Senior or generate 37.51% return on investment over 90 days.

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

FirstCash  vs.  Eaton Vance Senior

FirstCash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FirstCash has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Eaton Vance Senior

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Senior are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FirstCash and Eaton Vance

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

The idea behind FirstCash and Eaton Vance Senior 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..