Correlation Between Total Return and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Total Return 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 Total Return and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Eaton Vance Worldwide, you can compare the effects of market volatilities on Total Return 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 Total Return with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Eaton Vance.
Diversification Opportunities for Total Return and Eaton Vance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Total and Eaton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Eaton Vance Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Worldwide and Total Return 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 Total Return Fund 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 Worldwide has no effect on the direction of Total Return i.e., Total Return and Eaton Vance go up and down completely randomly.
Pair Corralation between Total Return and Eaton Vance
Assuming the 90 days horizon Total Return Fund is expected to generate 0.34 times more return on investment than Eaton Vance. However, Total Return Fund is 2.9 times less risky than Eaton Vance. It trades about 0.06 of its potential returns per unit of risk. Eaton Vance Worldwide is currently generating about -0.05 per unit of risk. If you would invest 860.00 in Total Return Fund on December 1, 2024 and sell it today you would earn a total of 11.00 from holding Total Return Fund or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Total Return Fund vs. Eaton Vance Worldwide
Performance |
Timeline |
Total Return |
Eaton Vance Worldwide |
Total Return and Eaton Vance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Total Return and Eaton Vance
The main advantage of trading using opposite Total Return and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return 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.Total Return vs. Health Care Fund | Total Return vs. Eaton Vance Worldwide | Total Return vs. Eventide Healthcare Life | Total Return vs. Hartford Healthcare Hls |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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