Correlation Between Eaton Vance and ENTERGY

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

Diversification Opportunities for Eaton Vance and ENTERGY

-0.74

Correlation Coefficient

Eaton Vance  ENTERGY

Pay attention - limited upside

The 3 months correlation between Eaton and ENTERGY is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and ENTERGY LA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERGY LA LLC 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 ENTERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERGY LA LLC has no effect on the direction of Eaton Vance i.e., Eaton Vance and ENTERGY go up and down completely randomly.

Pair Corralation between Eaton Vance and ENTERGY

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.94 times more return on investment than ENTERGY. However, Eaton Vance is 1.94 times more volatile than ENTERGY LA LLC. It trades about 0.26 of its potential returns per unit of risk. ENTERGY LA LLC is currently generating about -0.08 per unit of risk. If you would invest  2,063  in Eaton Vance Enhanced on September 2, 2024 and sell it today you would earn a total of  286.00  from holding Eaton Vance Enhanced or generate 13.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Eaton Vance Enhanced  vs.  ENTERGY LA LLC

Eaton Vance Enhanced

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 20 (%) 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.

ENTERGY LA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENTERGY LA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ENTERGY 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 ENTERGY

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

The idea behind Eaton Vance Enhanced and ENTERGY LA LLC 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 CEOs Directory module to screen CEOs from public companies around the world.