Correlation Between Jhancock Disciplined and Eaton Vance

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

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

Diversification Opportunities for Jhancock Disciplined and Eaton Vance

-0.63

Correlation Coefficient

Jhancock Disciplined  Eaton Vance

Excellent diversification

The 3 months correlation between Jhancock and Eaton is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short and Jhancock Disciplined 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 Jhancock Disciplined Value 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 Short has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Eaton Vance go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Eaton Vance

Assuming the 90 days horizon Jhancock Disciplined Value is expected to generate 2.9 times more return on investment than Eaton Vance. However, Jhancock Disciplined is 2.9 times more volatile than Eaton Vance Short. It trades about 0.09 of its potential returns per unit of risk. Eaton Vance Short is currently generating about 0.06 per unit of risk. If you would invest  1,949  in Jhancock Disciplined Value on September 14, 2024 and sell it today you would earn a total of  731.00  from holding Jhancock Disciplined Value or generate 37.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jhancock Disciplined Value  vs.  Eaton Vance Short

Jhancock Disciplined

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Disciplined Value are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Disciplined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Short has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Jhancock Disciplined and Eaton Vance

The main advantage of trading using opposite Jhancock Disciplined and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined 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 Jhancock Disciplined Value and Eaton Vance Short 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.