Correlation Between Eaton Vance and Invesco Global

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

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

Diversification Opportunities for Eaton Vance and Invesco Global

-0.53

Correlation Coefficient

Eaton Vance  Invesco Global

Excellent diversification

The 3 months correlation between Eaton and Invesco is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Invesco Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Water 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 Enhanced are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Water has no effect on the direction of Eaton Vance i.e., Eaton Vance and Invesco Global go up and down completely randomly.

Pair Corralation between Eaton Vance and Invesco Global

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 0.95 times more return on investment than Invesco Global. However, Eaton Vance Enhanced is 1.06 times less risky than Invesco Global. It trades about 0.19 of its potential returns per unit of risk. Invesco Global Water is currently generating about -0.35 per unit of risk. If you would invest  2,315  in Eaton Vance Enhanced on September 24, 2024 and sell it today you would earn a total of  66.00  from holding Eaton Vance Enhanced or generate 2.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eaton Vance Enhanced  vs.  Invesco Global Water

Eaton Vance Enhanced

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Invesco Global Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Global Water has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Eaton Vance and Invesco Global

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

The idea behind Eaton Vance Enhanced and Invesco Global Water 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.