Correlation Between Gabelli Equity and Eaton Vance

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

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

Diversification Opportunities for Gabelli Equity and Eaton Vance

-0.14

Correlation Coefficient

Gabelli Equity  Eaton Vance

Good diversification

The 3 months correlation between Gabelli and Eaton is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Eaton Vance Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Gabelli Equity 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 The Gabelli Equity 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 Tax has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Eaton Vance go up and down completely randomly.

Pair Corralation between Gabelli Equity and Eaton Vance

Assuming the 90 days trading horizon Gabelli Equity is expected to generate 3.32 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, The Gabelli Equity is 1.22 times less risky than Eaton Vance. It trades about 0.03 of its potential returns per unit of risk. Eaton Vance Tax Managed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  616.00  in Eaton Vance Tax Managed on December 1, 2024 and sell it today you would earn a total of  221.00  from holding Eaton Vance Tax Managed or generate 35.88% return on investment over 90 days.

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

The Gabelli Equity  vs.  Eaton Vance Tax Managed

Gabelli Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Eaton Vance Tax

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax Managed are ranked lower than 2 (%) 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.

Pair Trading with Gabelli Equity and Eaton Vance

The main advantage of trading using opposite Gabelli Equity and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity 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 The Gabelli Equity and Eaton Vance Tax Managed 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.