Correlation Between Eaton Vance and Cboe Vest

Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Cboe Vest 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 Cboe Vest 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 Cboe Vest Sp, you can compare the effects of market volatilities on Eaton Vance and Cboe Vest 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 Cboe Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Cboe Vest.

Diversification Opportunities for Eaton Vance and Cboe Vest

0.89

Correlation Coefficient

Eaton Vance  Cboe Vest

Very poor diversification

The 3 months correlation between Eaton and Cboe is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Cboe Vest Sp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe Vest Sp 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 Cboe Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe Vest Sp has no effect on the direction of Eaton Vance i.e., Eaton Vance and Cboe Vest go up and down completely randomly.

Pair Corralation between Eaton Vance and Cboe Vest

Assuming the 90 days horizon Eaton Vance is expected to generate 2.33 times less return on investment than Cboe Vest. But when comparing it to its historical volatility, Eaton Vance Floating Rate is 2.67 times less risky than Cboe Vest. It trades about 0.24 of its potential returns per unit of risk. Cboe Vest Sp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,941  in Cboe Vest Sp on September 15, 2024 and sell it today you would earn a total of  89.00  from holding Cboe Vest Sp or generate 4.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Eaton Vance Floating Rate  vs.  Cboe Vest Sp

Eaton Vance Floating

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 18 (%) 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.

Cboe Vest Sp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cboe Vest Sp are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Cboe Vest 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 Cboe Vest

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

The idea behind Eaton Vance Floating Rate and Cboe Vest Sp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.