Correlation Between Eaton Vance and Bts Managed

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

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

Diversification Opportunities for Eaton Vance and Bts Managed

0.47

Correlation Coefficient

Eaton Vance  Bts Managed

Very weak diversification

The 3 months correlation between Eaton and Bts is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Global and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income and Eaton Vance 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 Eaton Vance Global are associated (or correlated) with Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and Bts Managed go up and down completely randomly.

Pair Corralation between Eaton Vance and Bts Managed

Assuming the 90 days horizon Eaton Vance Global is expected to generate 0.63 times more return on investment than Bts Managed. However, Eaton Vance Global is 1.59 times less risky than Bts Managed. It trades about 0.31 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.1 per unit of risk. If you would invest  820.00  in Eaton Vance Global on February 18, 2024 and sell it today you would earn a total of  25.00  from holding Eaton Vance Global or generate 3.05% return on investment over 90 days.

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

Eaton Vance Global  vs.  Bts Managed Income

Eaton Vance Global

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Global are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. 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.

Bts Managed Income

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Eaton Vance and Bts Managed

The main advantage of trading using opposite Eaton Vance and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.

The idea behind Eaton Vance Global and Bts Managed Income 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.