Correlation Between Eaton Vance and Heating Oil

Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Heating Oil 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 Heating Oil 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 Heating Oil, you can compare the effects of market volatilities on Eaton Vance and Heating Oil 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 Heating Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Heating Oil.

Diversification Opportunities for Eaton Vance and Heating Oil

-0.71

Correlation Coefficient

Eaton Vance  Heating Oil

Pay attention - limited upside

The 3 months correlation between Eaton and Heating is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Global and Heating Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heating Oil 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 Heating Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heating Oil has no effect on the direction of Eaton Vance i.e., Eaton Vance and Heating Oil go up and down completely randomly.

Pair Corralation between Eaton Vance and Heating Oil

Assuming the 90 days horizon Eaton Vance Global is expected to generate 0.15 times more return on investment than Heating Oil. However, Eaton Vance Global is 6.8 times less risky than Heating Oil. It trades about 0.1 of its potential returns per unit of risk. Heating Oil is currently generating about -0.31 per unit of risk. If you would invest  835.00  in Eaton Vance Global on March 8, 2024 and sell it today you would earn a total of  6.00  from holding Eaton Vance Global or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Eaton Vance Global  vs.  Heating Oil

Eaton Vance Global

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Global are ranked lower than 17 (%) 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.

Heating Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heating Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Commodity's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for Heating Oil shareholders.

Pair Trading with Eaton Vance and Heating Oil

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

The idea behind Eaton Vance Global and Heating Oil 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.