Correlation Between Eaton Vance and Guggenheim Risk

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

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

Diversification Opportunities for Eaton Vance and Guggenheim Risk

0.37

Correlation Coefficient

Eaton Vance  Guggenheim Risk

Weak diversification

The 3 months correlation between Eaton and Guggenheim is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Richard and Guggenheim Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Risk Managed 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 Richard are associated (or correlated) with Guggenheim Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Risk Managed has no effect on the direction of Eaton Vance i.e., Eaton Vance and Guggenheim Risk go up and down completely randomly.

Pair Corralation between Eaton Vance and Guggenheim Risk

Assuming the 90 days horizon Eaton Vance Richard is expected to generate 0.92 times more return on investment than Guggenheim Risk. However, Eaton Vance Richard is 1.08 times less risky than Guggenheim Risk. It trades about 0.14 of its potential returns per unit of risk. Guggenheim Risk Managed is currently generating about 0.08 per unit of risk. If you would invest  1,787  in Eaton Vance Richard on September 4, 2024 and sell it today you would earn a total of  108.00  from holding Eaton Vance Richard or generate 6.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Eaton Vance Richard  vs.  Guggenheim Risk Managed

Eaton Vance Richard

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Richard are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guggenheim Risk Managed

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Risk Managed are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Risk 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 Guggenheim Risk

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

The idea behind Eaton Vance Richard and Guggenheim Risk Managed 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..