Correlation Between Eaton Vance and Fidelity Large

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

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

Diversification Opportunities for Eaton Vance and Fidelity Large

0.88

Correlation Coefficient

Eaton Vance  Fidelity Large

Very poor diversification

The 3 months correlation between Eaton and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Fidelity Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Large Cap 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 Tax are associated (or correlated) with Fidelity Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Large Cap has no effect on the direction of Eaton Vance i.e., Eaton Vance and Fidelity Large go up and down completely randomly.

Pair Corralation between Eaton Vance and Fidelity Large

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.78 times more return on investment than Fidelity Large. However, Eaton Vance Tax is 1.29 times less risky than Fidelity Large. It trades about -0.09 of its potential returns per unit of risk. Fidelity Large Cap is currently generating about -0.11 per unit of risk. If you would invest  1,326  in Eaton Vance Tax on January 28, 2024 and sell it today you would lose (22.00) from holding Eaton Vance Tax or give up 1.66% of portfolio value over 90 days.

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

Eaton Vance Tax  vs.  Fidelity Large Cap

Eaton Vance Tax

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Fidelity Large Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Large 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 Fidelity Large

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

The idea behind Eaton Vance Tax and Fidelity Large Cap 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.