Correlation Between SLM Corp and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both SLM Corp 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 SLM Corp and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Eaton Vance Municipal, you can compare the effects of market volatilities on SLM Corp 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 SLM Corp with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Eaton Vance.
Diversification Opportunities for SLM Corp and Eaton Vance
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SLM and Eaton is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SLM 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 SLM Corp 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 SLM 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 SLM Corp i.e., SLM Corp and Eaton Vance go up and down completely randomly.
Pair Corralation between SLM Corp and Eaton Vance
Considering the 90-day investment horizon SLM Corp is expected to generate 4.64 times more return on investment than Eaton Vance. However, SLM Corp is 4.64 times more volatile than Eaton Vance Municipal. It trades about 0.01 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about -0.15 per unit of risk. If you would invest 2,775 in SLM Corp on September 25, 2024 and sell it today you would earn a total of 4.00 from holding SLM Corp or generate 0.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SLM Corp vs. Eaton Vance Municipal
Performance |
Timeline |
SLM Corp |
Eaton Vance Municipal |
SLM Corp and Eaton Vance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SLM Corp and Eaton Vance
The main advantage of trading using opposite SLM Corp and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp 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.SLM Corp vs. Orix Corp Ads | SLM Corp vs. FirstCash | SLM Corp vs. Medallion Financial Corp | SLM Corp vs. Oportun Financial Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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