Correlation Between Victory High and Eaton Vance

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

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

Diversification Opportunities for Victory High and Eaton Vance

0.27

Correlation Coefficient

Victory High  Eaton Vance

Modest diversification

The 3 months correlation between Victory and Eaton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Income and Eaton Vance Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Global and Victory High 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 Victory High Income 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 Global has no effect on the direction of Victory High i.e., Victory High and Eaton Vance go up and down completely randomly.

Pair Corralation between Victory High and Eaton Vance

Assuming the 90 days horizon Victory High Income is expected to under-perform the Eaton Vance. But the mutual fund apears to be less risky and, when comparing its historical volatility, Victory High Income is 1.96 times less risky than Eaton Vance. The mutual fund trades about -0.4 of its potential returns per unit of risk. The Eaton Vance Global is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,460  in Eaton Vance Global on October 8, 2024 and sell it today you would lose (25.00) from holding Eaton Vance Global or give up 1.71% of portfolio value over 90 days.

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

Victory High Income  vs.  Eaton Vance Global

Victory High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victory High Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Victory High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory High and Eaton Vance

The main advantage of trading using opposite Victory High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High 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 Victory High Income and Eaton Vance Global 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.