Correlation Between Eaton Vance and Strategy Shares

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

Diversification Opportunities for Eaton Vance and Strategy Shares

0.94

Correlation Coefficient

Eaton Vance  Strategy Shares

Almost no diversification

The 3 months correlation between Eaton and Strategy is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of Eaton Vance i.e., Eaton Vance and Strategy Shares go up and down completely randomly.

Pair Corralation between Eaton Vance and Strategy Shares

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.22 times more return on investment than Strategy Shares. However, Eaton Vance is 1.22 times more volatile than Strategy Shares NewfoundReSolve. It trades about 0.28 of its potential returns per unit of risk. Strategy Shares NewfoundReSolve is currently generating about 0.16 per unit of risk. If you would invest  2,101  in Eaton Vance Enhanced on September 12, 2024 and sell it today you would earn a total of  298.00  from holding Eaton Vance Enhanced or generate 14.18% return on investment over 90 days.

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

Eaton Vance Enhanced  vs.  Strategy Shares NewfoundReSolv

Eaton Vance Enhanced

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Eaton Vance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Strategy Shares Newf

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares NewfoundReSolve are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Strategy Shares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eaton Vance and Strategy Shares

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

The idea behind Eaton Vance Enhanced and Strategy Shares NewfoundReSolve 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.