Correlation Between Vanguard Growth and Eaton Vance

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

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

Diversification Opportunities for Vanguard Growth and Eaton Vance

0.02

Correlation Coefficient

Vanguard Growth  Eaton Vance

Significant diversification

The 3 months correlation between Vanguard and Eaton is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Enhanced and Vanguard Growth 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 Vanguard Growth Index 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 Enhanced has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Eaton Vance go up and down completely randomly.

Pair Corralation between Vanguard Growth and Eaton Vance

Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 1.07 times more return on investment than Eaton Vance. However, Vanguard Growth is 1.07 times more volatile than Eaton Vance Enhanced. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Enhanced is currently generating about -0.07 per unit of risk. If you would invest  46,939  in Vanguard Growth Index on September 11, 2025 and sell it today you would earn a total of  2,365  from holding Vanguard Growth Index or generate 5.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Vanguard Growth Index  vs.  Eaton Vance Enhanced

Vanguard Growth Index

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vanguard Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Eaton Vance Enhanced

Risk-Adjusted Performance

Weakest

Over the last 90 days Eaton Vance Enhanced 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard Growth and Eaton Vance

The main advantage of trading using opposite Vanguard Growth and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth 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 Vanguard Growth Index and Eaton Vance Enhanced 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.