Correlation Between Direct Digital and Eaton Vance

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

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

Diversification Opportunities for Direct Digital and Eaton Vance

0.57

Correlation Coefficient

Direct Digital  Eaton Vance

Very weak diversification

The 3 months correlation between Direct and Eaton is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Direct Digital Holdings and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and Direct Digital 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 Direct Digital Holdings 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 National has no effect on the direction of Direct Digital i.e., Direct Digital and Eaton Vance go up and down completely randomly.

Pair Corralation between Direct Digital and Eaton Vance

Given the investment horizon of 90 days Direct Digital Holdings is expected to generate 64.46 times more return on investment than Eaton Vance. However, Direct Digital is 64.46 times more volatile than Eaton Vance National. It trades about 0.04 of its potential returns per unit of risk. Eaton Vance National is currently generating about 0.03 per unit of risk. If you would invest  236.00  in Direct Digital Holdings on May 13, 2025 and sell it today you would lose (195.00) from holding Direct Digital Holdings or give up 82.63% of portfolio value over 90 days.

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

Direct Digital Holdings  vs.  Eaton Vance National

Direct Digital Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Direct Digital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Eaton Vance National

Risk-Adjusted Performance

Weakest

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic 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.

Pair Trading with Direct Digital and Eaton Vance

The main advantage of trading using opposite Direct Digital and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Digital 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 Direct Digital Holdings and Eaton Vance National 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.