Correlation Between Virtus Global and Eaton Vance

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

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

Diversification Opportunities for Virtus Global and Eaton Vance

0.68

Correlation Coefficient

Virtus Global  Eaton Vance

Poor diversification

The 3 months correlation between Virtus and Eaton is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Dividend and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk and Virtus Global 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 Virtus Global Dividend 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 Risk has no effect on the direction of Virtus Global i.e., Virtus Global and Eaton Vance go up and down completely randomly.

Pair Corralation between Virtus Global and Eaton Vance

Considering the 90-day investment horizon Virtus Global Dividend is expected to generate 1.35 times more return on investment than Eaton Vance. However, Virtus Global is 1.35 times more volatile than Eaton Vance Risk. It trades about 0.17 of its potential returns per unit of risk. Eaton Vance Risk is currently generating about 0.18 per unit of risk. If you would invest  448.00  in Virtus Global Dividend on January 28, 2024 and sell it today you would earn a total of  91.00  from holding Virtus Global Dividend or generate 20.31% return on investment over 90 days.

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

Virtus Global Dividend  vs.  Eaton Vance Risk

Virtus Global Dividend

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Dividend are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Virtus Global is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Eaton Vance Risk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Risk are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Virtus Global and Eaton Vance

The main advantage of trading using opposite Virtus Global and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Global 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 Virtus Global Dividend and Eaton Vance Risk 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.