Correlation Between Eaton Vance and Freedom Bank

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

By analyzing existing cross correlation between Eaton Vance Floating and Freedom Bank of, you can compare the effects of market volatilities on Eaton Vance and Freedom Bank 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 Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Freedom Bank.

Diversification Opportunities for Eaton Vance and Freedom Bank

-0.01

Correlation Coefficient

Eaton Vance  Freedom Bank

Good diversification

The 3 months correlation between Eaton and Freedom is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank 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 Floating are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Eaton Vance i.e., Eaton Vance and Freedom Bank go up and down completely randomly.

Pair Corralation between Eaton Vance and Freedom Bank

Considering the 90-day investment horizon Eaton Vance Floating is expected to generate 0.42 times more return on investment than Freedom Bank. However, Eaton Vance Floating is 2.38 times less risky than Freedom Bank. It trades about 0.37 of its potential returns per unit of risk. Freedom Bank of is currently generating about 0.13 per unit of risk. If you would invest  1,309  in Eaton Vance Floating on September 13, 2024 and sell it today you would earn a total of  37.72  from holding Eaton Vance Floating or generate 2.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Eaton Vance Floating  vs.  Freedom Bank of

Eaton Vance Floating

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Freedom Bank

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Bank of are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Freedom Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Freedom Bank

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

The idea behind Eaton Vance Floating and Freedom Bank of 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.