Correlation Between Eaton Vance and Barings Global

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

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

Diversification Opportunities for Eaton Vance and Barings Global

0.78

Correlation Coefficient

Eaton Vance  Barings Global

Poor diversification

The 3 months correlation between Eaton and Barings is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Barings Global Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Short 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 Enhanced are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Short has no effect on the direction of Eaton Vance i.e., Eaton Vance and Barings Global go up and down completely randomly.

Pair Corralation between Eaton Vance and Barings Global

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to generate 1.52 times more return on investment than Barings Global. However, Eaton Vance is 1.52 times more volatile than Barings Global Short. It trades about 0.06 of its potential returns per unit of risk. Barings Global Short is currently generating about -0.05 per unit of risk. If you would invest  2,005  in Eaton Vance Enhanced on February 6, 2024 and sell it today you would earn a total of  25.00  from holding Eaton Vance Enhanced or generate 1.25% return on investment over 90 days.

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

Eaton Vance Enhanced  vs.  Barings Global Short

Eaton Vance Enhanced

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Barings Global Short

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Global Short are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Barings Global is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Eaton Vance and Barings Global

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

The idea behind Eaton Vance Enhanced and Barings Global Short 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.