Correlation Between Target Global and Eaton Vance

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

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

Diversification Opportunities for Target Global and Eaton Vance

-0.74

Correlation Coefficient

Target Global  Eaton Vance

Pay attention - limited upside

The 3 months correlation between Target and Eaton is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Target Global Acquisition and Eaton Vance Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Floating and Target Global 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 Target Global Acquisition 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 Floating has no effect on the direction of Target Global i.e., Target Global and Eaton Vance go up and down completely randomly.

Pair Corralation between Target Global and Eaton Vance

Assuming the 90 days horizon Target Global Acquisition is expected to under-perform the Eaton Vance. But the stock apears to be less risky and, when comparing its historical volatility, Target Global Acquisition is 39.19 times less risky than Eaton Vance. The stock trades about -0.13 of its potential returns per unit of risk. The Eaton Vance Floating is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,276  in Eaton Vance Floating on September 3, 2024 and sell it today you would earn a total of  68.00  from holding Eaton Vance Floating or generate 5.33% return on investment over 90 days.

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

Target Global Acquisition  vs.  Eaton Vance Floating

Target Global Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Target Global Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Target Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Eaton Vance Floating

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Target Global and Eaton Vance

The main advantage of trading using opposite Target Global and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Global 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 Target Global Acquisition and Eaton Vance Floating 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.