Correlation Between Gabelli Dividend and Eaton Vance

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

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

Diversification Opportunities for Gabelli Dividend and Eaton Vance

0.93

Correlation Coefficient

Gabelli Dividend  Eaton Vance

Almost no diversification

The 3 months correlation between Gabelli and Eaton is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Dividend Income 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 Gabelli Dividend 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 Gabelli Dividend Income 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 Gabelli Dividend i.e., Gabelli Dividend and Eaton Vance go up and down completely randomly.

Pair Corralation between Gabelli Dividend and Eaton Vance

Considering the 90-day investment horizon Gabelli Dividend is expected to generate 1.09 times less return on investment than Eaton Vance. In addition to that, Gabelli Dividend is 1.41 times more volatile than Eaton Vance Tax. It trades about 0.2 of its total potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.31 per unit of volatility. If you would invest  1,390  in Eaton Vance Tax on September 12, 2024 and sell it today you would earn a total of  128.00  from holding Eaton Vance Tax or generate 9.21% return on investment over 90 days.

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

Gabelli Dividend Income  vs.  Eaton Vance Tax

Gabelli Dividend Income

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Dividend Income are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly uncertain fundamental indicators, Gabelli Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eaton Vance Tax

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Dividend and Eaton Vance

The main advantage of trading using opposite Gabelli Dividend and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Dividend 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 Gabelli Dividend Income 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 Transaction History module to view history of all your transactions and understand their impact on performance.