Correlation Between Gold and Eaton Vance

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

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

Diversification Opportunities for Gold and Eaton Vance

0.67

Correlation Coefficient

Gold  Eaton Vance

Poor diversification

The 3 months correlation between Gold and Eaton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Eaton Vance Parametric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Parametric and Gold 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 Gold And Precious 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 Parametric has no effect on the direction of Gold i.e., Gold and Eaton Vance go up and down completely randomly.

Pair Corralation between Gold and Eaton Vance

Assuming the 90 days horizon Gold And Precious is expected to under-perform the Eaton Vance. In addition to that, Gold is 2.93 times more volatile than Eaton Vance Parametric. It trades about -0.11 of its total potential returns per unit of risk. Eaton Vance Parametric is currently generating about -0.06 per unit of volatility. If you would invest  1,486  in Eaton Vance Parametric on September 23, 2024 and sell it today you would lose (39.00) from holding Eaton Vance Parametric or give up 2.62% of portfolio value over 90 days.

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

Gold And Precious  vs.  Eaton Vance Parametric

Gold And Precious

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold And Precious has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Eaton Vance Parametric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Parametric has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary 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 Gold and Eaton Vance

The main advantage of trading using opposite Gold and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold 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 Gold And Precious and Eaton Vance Parametric 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.