Correlation Between Eaton Vance and The Hartford

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

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

Diversification Opportunities for Eaton Vance and The Hartford

0.72

Correlation Coefficient

Eaton Vance  The Hartford

Poor diversification

The 3 months correlation between Eaton and The is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance E and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna and Eaton Vance 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 Eaton Vance E are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Interna has no effect on the direction of Eaton Vance i.e., Eaton Vance and The Hartford go up and down completely randomly.

Pair Corralation between Eaton Vance and The Hartford

Assuming the 90 days horizon Eaton Vance E is expected to generate 0.37 times more return on investment than The Hartford. However, Eaton Vance E is 2.69 times less risky than The Hartford. It trades about -0.07 of its potential returns per unit of risk. The Hartford International is currently generating about -0.03 per unit of risk. If you would invest  1,055  in Eaton Vance E on September 7, 2024 and sell it today you would lose (12.00) from holding Eaton Vance E or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Eaton Vance E  vs.  The Hartford International

Eaton Vance E

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hartford Interna

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Eaton Vance and The Hartford

The main advantage of trading using opposite Eaton Vance and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.

The idea behind Eaton Vance E and The Hartford International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.