Correlation Between CBH and Eaton Vance

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

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

Diversification Opportunities for CBH and Eaton Vance

0.0

Correlation Coefficient

CBH  Eaton Vance

Pay attention - limited upside

The 3 months correlation between CBH and Eaton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Eaton Vance New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance New and CBH 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 CBH 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 New has no effect on the direction of CBH i.e., CBH and Eaton Vance go up and down completely randomly.

Pair Corralation between CBH and Eaton Vance

If you would invest (100.00) in Eaton Vance New on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Eaton Vance New or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CBH  vs.  Eaton Vance New

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Eaton Vance New

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CBH and Eaton Vance

The main advantage of trading using opposite CBH and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH 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 CBH and Eaton Vance New 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.