Correlation Between Dreyfus Worldwide and Eaton Vance

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

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

Diversification Opportunities for Dreyfus Worldwide and Eaton Vance

0.97

Correlation Coefficient

Dreyfus Worldwide  Eaton Vance

Almost no diversification

The 3 months correlation between Dreyfus and Eaton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Worldwide Growth and Eaton Vance Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Dreyfus Worldwide 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 Dreyfus Worldwide Growth 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 Tax has no effect on the direction of Dreyfus Worldwide i.e., Dreyfus Worldwide and Eaton Vance go up and down completely randomly.

Pair Corralation between Dreyfus Worldwide and Eaton Vance

Assuming the 90 days horizon Dreyfus Worldwide is expected to generate 1.1 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Dreyfus Worldwide Growth is 1.03 times less risky than Eaton Vance. It trades about 0.14 of its potential returns per unit of risk. Eaton Vance Tax Managed is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,676  in Eaton Vance Tax Managed on May 5, 2025 and sell it today you would earn a total of  119.00  from holding Eaton Vance Tax Managed or generate 7.1% return on investment over 90 days.

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

Dreyfus Worldwide Growth  vs.  Eaton Vance Tax Managed

Dreyfus Worldwide Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Worldwide Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dreyfus Worldwide may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Eaton Vance Tax

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax Managed are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dreyfus Worldwide and Eaton Vance

The main advantage of trading using opposite Dreyfus Worldwide and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Worldwide 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 Dreyfus Worldwide Growth and Eaton Vance Tax Managed 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.