Correlation Between EXD and Eaton Vance

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

By analyzing existing cross correlation between EXD and Eaton Vance Tax, you can compare the effects of market volatilities on EXD and Eaton Vance 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 EXD with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXD and Eaton Vance.

Diversification Opportunities for EXD and Eaton Vance

0.45

Correlation Coefficient

EXD  Eaton Vance

Very weak diversification

The 3 months correlation between EXD and Eaton is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding EXD and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and EXD 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 EXD are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Tax has no effect on the direction of EXD i.e., EXD and Eaton Vance go up and down completely randomly.

Pair Corralation between EXD and Eaton Vance

If you would invest  1,429  in Eaton Vance Tax on September 5, 2024 and sell it today you would earn a total of  83.00  from holding Eaton Vance Tax or generate 5.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

EXD  vs.  Eaton Vance Tax

EXD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, EXD is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Eaton Vance Tax

Risk-Adjusted Performance

17 of 100

Solid

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

Pair Trading with EXD and Eaton Vance

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

The idea behind EXD and Eaton Vance Tax 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.