Correlation Between Distoken Acquisition and Eaton Vance

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

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

Diversification Opportunities for Distoken Acquisition and Eaton Vance

0.84

Correlation Coefficient

Distoken Acquisition  Eaton Vance

Very poor diversification

The 3 months correlation between Distoken and Eaton is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and Distoken Acquisition 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 Distoken Acquisition 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 Senior has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Eaton Vance go up and down completely randomly.

Pair Corralation between Distoken Acquisition and Eaton Vance

Given the investment horizon of 90 days Distoken Acquisition is expected to generate 1.65 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Distoken Acquisition is 1.06 times less risky than Eaton Vance. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,258  in Eaton Vance Senior on August 17, 2024 and sell it today you would earn a total of  23.00  from holding Eaton Vance Senior or generate 1.83% return on investment over 90 days.

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

Distoken Acquisition  vs.  Eaton Vance Senior

Distoken Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Distoken Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Eaton Vance Senior

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Senior are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Distoken Acquisition and Eaton Vance

The main advantage of trading using opposite Distoken Acquisition and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition 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 Distoken Acquisition and Eaton Vance Senior 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.