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 Tax, 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

-0.29

Correlation Coefficient

HYB  Eaton Vance

Very good diversification

The 3 months correlation between HYB and Eaton is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding HYB and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax 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 Tax 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 0.46 times more return on investment than Eaton Vance. However, HYB is 2.16 times less risky than Eaton Vance. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.03 per unit of risk. If you would invest  807.00  in HYB on December 23, 2024 and sell it today you would earn a total of  13.00  from holding HYB or generate 1.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.21%
Values	Daily Returns

HYB  vs.  Eaton Vance Tax

HYB

Risk-Adjusted Performance

OK

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 Tax

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The new stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Tax 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.