Correlation Between Guidemark Smallmid and Eaton Vance

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

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

Diversification Opportunities for Guidemark Smallmid and Eaton Vance

0.97

Correlation Coefficient

Guidemark Smallmid  Eaton Vance

Almost no diversification

The 3 months correlation between Guidemark and Eaton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Smallmid Cap and Eaton Vance Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Small and Guidemark Smallmid 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 Guidemark Smallmid Cap 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 Small has no effect on the direction of Guidemark Smallmid i.e., Guidemark Smallmid and Eaton Vance go up and down completely randomly.

Pair Corralation between Guidemark Smallmid and Eaton Vance

Assuming the 90 days horizon Guidemark Smallmid Cap is expected to generate 0.97 times more return on investment than Eaton Vance. However, Guidemark Smallmid Cap is 1.03 times less risky than Eaton Vance. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Small Cap is currently generating about 0.08 per unit of risk. If you would invest  2,058  in Guidemark Smallmid Cap on September 16, 2024 and sell it today you would earn a total of  177.00  from holding Guidemark Smallmid Cap or generate 8.6% return on investment over 90 days.

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

Guidemark Smallmid Cap  vs.  Eaton Vance Small Cap

Guidemark Smallmid Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Smallmid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Guidemark Smallmid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eaton Vance Small

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidemark Smallmid and Eaton Vance

The main advantage of trading using opposite Guidemark Smallmid and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Smallmid 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 Guidemark Smallmid Cap and Eaton Vance Small Cap 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.