Correlation Between HYB and Eaton Vance

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

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

Diversification Opportunities for HYB and Eaton Vance

-0.56

Correlation Coefficient

HYB  Eaton Vance

Excellent diversification

The 3 months correlation between HYB and Eaton is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding HYB and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk and HYB 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 HYB 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 Risk has no effect on the direction of HYB i.e., HYB and Eaton Vance go up and down completely randomly.

Pair Corralation between HYB and Eaton Vance

Considering the 90-day investment horizon HYB is expected to generate 0.42 times more return on investment than Eaton Vance. However, HYB is 2.37 times less risky than Eaton Vance. It trades about 0.04 of its potential returns per unit of risk. Eaton Vance Risk is currently generating about -0.12 per unit of risk. If you would invest  816.00  in HYB on December 26, 2024 and sell it today you would earn a total of  4.00  from holding HYB or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.0%
Values	Daily Returns

HYB  vs.  Eaton Vance Risk

HYB

Risk-Adjusted Performance

Insignificant

Over the last 90 days HYB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HYB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Risk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Risk has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with HYB and Eaton Vance

The main advantage of trading using opposite HYB and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYB 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 HYB and Eaton Vance Risk 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.