Correlation Between Eaton Vance and Invesco International

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

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

Diversification Opportunities for Eaton Vance and Invesco International

0.62

Correlation Coefficient

Eaton Vance  Invesco International

Poor diversification

The 3 months correlation between Eaton and Invesco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Global and Invesco International Companie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International 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 Global are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Eaton Vance i.e., Eaton Vance and Invesco International go up and down completely randomly.

Pair Corralation between Eaton Vance and Invesco International

If you would invest  1,079  in Eaton Vance Global on September 23, 2024 and sell it today you would earn a total of  10.00  from holding Eaton Vance Global or generate 0.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Eaton Vance Global  vs.  Invesco International Companie

Eaton Vance Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Global are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International Companies has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Invesco International 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 Invesco International

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

The idea behind Eaton Vance Global and Invesco International Companies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.