Correlation Between Oportun Financial and Eaton Vance

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

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

Diversification Opportunities for Oportun Financial and Eaton Vance

-0.57

Correlation Coefficient

Oportun Financial  Eaton Vance

Excellent diversification

The 3 months correlation between Oportun and Eaton is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Oportun Financial Corp 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 Oportun Financial 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 Oportun Financial Corp 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 Oportun Financial i.e., Oportun Financial and Eaton Vance go up and down completely randomly.

Pair Corralation between Oportun Financial and Eaton Vance

Given the investment horizon of 90 days Oportun Financial Corp is expected to generate 10.06 times more return on investment than Eaton Vance. However, Oportun Financial is 10.06 times more volatile than Eaton Vance Municipal. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about -0.11 per unit of risk. If you would invest  292.00  in Oportun Financial Corp on September 21, 2024 and sell it today you would earn a total of  94.00  from holding Oportun Financial Corp or generate 32.19% return on investment over 90 days.

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

Oportun Financial Corp  vs.  Eaton Vance Municipal

Oportun Financial Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oportun Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Oportun Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 investors with long positions. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oportun Financial and Eaton Vance

The main advantage of trading using opposite Oportun Financial and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oportun Financial 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 Oportun Financial Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.