Correlation Between Korea Closed and Eaton Vance

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

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

Diversification Opportunities for Korea Closed and Eaton Vance

0.71

Correlation Coefficient

Korea Closed  Eaton Vance

Poor diversification

The 3 months correlation between Korea and Eaton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and Korea Closed 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 Korea Closed 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 Municipal has no effect on the direction of Korea Closed i.e., Korea Closed and Eaton Vance go up and down completely randomly.

Pair Corralation between Korea Closed and Eaton Vance

Allowing for the 90-day total investment horizon Korea Closed is expected to generate 9.6 times more return on investment than Eaton Vance. However, Korea Closed is 9.6 times more volatile than Eaton Vance Municipal. It trades about 0.07 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.0 per unit of risk. If you would invest  1,977  in Korea Closed on September 16, 2024 and sell it today you would earn a total of  33.00  from holding Korea Closed or generate 1.67% return on investment over 90 days.

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

Korea Closed  vs.  Eaton Vance Municipal

Korea Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korea Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite uncertain performance in the last few months, the Fund's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the mutual fund stockholders.

Eaton Vance Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Korea Closed and Eaton Vance

The main advantage of trading using opposite Korea Closed and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed 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 Korea Closed and Eaton Vance Municipal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.