Correlation Between Matthews Pacific and Eaton Vance

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

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

Diversification Opportunities for Matthews Pacific and Eaton Vance

0.47

Correlation Coefficient

Matthews Pacific  Eaton Vance

Very weak diversification

The 3 months correlation between Matthews and Eaton is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Pacific Tiger and Eaton Vance Greater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Greater and Matthews Pacific 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 Matthews Pacific Tiger 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 Greater has no effect on the direction of Matthews Pacific i.e., Matthews Pacific and Eaton Vance go up and down completely randomly.

Pair Corralation between Matthews Pacific and Eaton Vance

Assuming the 90 days horizon Matthews Pacific Tiger is expected to generate 1.33 times more return on investment than Eaton Vance. However, Matthews Pacific is 1.33 times more volatile than Eaton Vance Greater. It trades about 0.04 of its potential returns per unit of risk. Eaton Vance Greater is currently generating about -0.11 per unit of risk. If you would invest  1,926  in Matthews Pacific Tiger on September 15, 2024 and sell it today you would earn a total of  53.00  from holding Matthews Pacific Tiger or generate 2.75% return on investment over 90 days.

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

Matthews Pacific Tiger  vs.  Eaton Vance Greater

Matthews Pacific Tiger

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Pacific Tiger are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Matthews Pacific is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Greater

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Greater has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Matthews Pacific and Eaton Vance

The main advantage of trading using opposite Matthews Pacific and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Pacific 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 Matthews Pacific Tiger and Eaton Vance Greater 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.