Correlation Between Eaton Vance and Tfa Quantitative

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

By analyzing existing cross correlation between Eaton Vance Floating Rate and Tfa Quantitative, you can compare the effects of market volatilities on Eaton Vance and Tfa Quantitative 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 Tfa Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Tfa Quantitative.

Diversification Opportunities for Eaton Vance and Tfa Quantitative

0.78

Correlation Coefficient

Eaton Vance  Tfa Quantitative

Poor diversification

The 3 months correlation between Eaton and Tfa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Tfa Quantitative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Quantitative 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 Floating Rate are associated (or correlated) with Tfa Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Quantitative has no effect on the direction of Eaton Vance i.e., Eaton Vance and Tfa Quantitative go up and down completely randomly.

Pair Corralation between Eaton Vance and Tfa Quantitative

Assuming the 90 days horizon Eaton Vance is expected to generate 5.86 times less return on investment than Tfa Quantitative. But when comparing it to its historical volatility, Eaton Vance Floating Rate is 7.49 times less risky than Tfa Quantitative. It trades about 0.16 of its potential returns per unit of risk. Tfa Quantitative is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,076  in Tfa Quantitative on September 27, 2024 and sell it today you would earn a total of  76.00  from holding Tfa Quantitative or generate 7.06% return on investment over 90 days.

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

Eaton Vance Floating Rate  vs.  Tfa Quantitative

Eaton Vance Floating

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tfa Quantitative

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Quantitative are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tfa Quantitative may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eaton Vance and Tfa Quantitative

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

The idea behind Eaton Vance Floating Rate and Tfa Quantitative 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.