Correlation Between Pfizer and Eaton Vance

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Can any of the company-specific risk be diversified away by investing in both Pfizer 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 Pfizer and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Eaton Vance Enhanced, you can compare the effects of market volatilities on Pfizer 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 Pfizer with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Eaton Vance.

Diversification Opportunities for Pfizer and Eaton Vance

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pfizer and Eaton is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Enhanced and Pfizer 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 Pfizer Inc 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 Enhanced has no effect on the direction of Pfizer i.e., Pfizer and Eaton Vance go up and down completely randomly.

Pair Corralation between Pfizer and Eaton Vance

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Eaton Vance. In addition to that, Pfizer is 1.57 times more volatile than Eaton Vance Enhanced. It trades about -0.08 of its total potential returns per unit of risk. Eaton Vance Enhanced is currently generating about 0.26 per unit of volatility. If you would invest  1,875  in Eaton Vance Enhanced on September 4, 2024 and sell it today you would earn a total of  294.00  from holding Eaton Vance Enhanced or generate 15.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Pfizer Inc  vs.  Eaton Vance Enhanced

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Eaton Vance Enhanced 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Eaton Vance demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pfizer and Eaton Vance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and Eaton Vance

The main advantage of trading using opposite Pfizer and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer 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 Pfizer Inc and Eaton Vance Enhanced 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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