Correlation Between Scharf Global and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Scharf 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 Scharf 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 Scharf Global Opportunity and Eaton Vance Short, you can compare the effects of market volatilities on Scharf 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 Scharf Global with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Eaton Vance.

Diversification Opportunities for Scharf Global and Eaton Vance

-0.32

Correlation Coefficient

Scharf Global  Eaton Vance

Very good diversification

The 3 months correlation between Scharf and Eaton is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short and Scharf 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 Scharf Global Opportunity 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 Short has no effect on the direction of Scharf Global i.e., Scharf Global and Eaton Vance go up and down completely randomly.

Pair Corralation between Scharf Global and Eaton Vance

Assuming the 90 days horizon Scharf Global Opportunity is expected to under-perform the Eaton Vance. In addition to that, Scharf Global is 4.44 times more volatile than Eaton Vance Short. It trades about -0.1 of its total potential returns per unit of risk. Eaton Vance Short is currently generating about 0.29 per unit of volatility. If you would invest  718.00  in Eaton Vance Short on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Eaton Vance Short or generate 0.7% return on investment over 90 days.

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

Scharf Global Opportunity  vs.  Eaton Vance Short

Scharf Global Opportunity

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Global Opportunity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Scharf Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental 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 Scharf Global and Eaton Vance

The main advantage of trading using opposite Scharf Global and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf 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 Scharf Global Opportunity and Eaton Vance Short 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.