Correlation Between Eaton Vance and Ares Dynamic
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Ares Dynamic 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 Ares Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Floating and Ares Dynamic Credit, you can compare the effects of market volatilities on Eaton Vance and Ares Dynamic 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 Ares Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Ares Dynamic.
Diversification Opportunities for Eaton Vance and Ares Dynamic
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eaton and Ares is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and Ares Dynamic Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Dynamic Credit 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 Floating are associated (or correlated) with Ares Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Dynamic Credit has no effect on the direction of Eaton Vance i.e., Eaton Vance and Ares Dynamic go up and down completely randomly.
Pair Corralation between Eaton Vance and Ares Dynamic
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.23 times less return on investment than Ares Dynamic. But when comparing it to its historical volatility, Eaton Vance Floating is 1.12 times less risky than Ares Dynamic. It trades about 0.14 of its potential returns per unit of risk. Ares Dynamic Credit is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Ares Dynamic Credit on August 27, 2024 and sell it today you would earn a total of 500.00 from holding Ares Dynamic Credit or generate 48.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Floating vs. Ares Dynamic Credit
Performance |
| Timeline |
| Eaton Vance Floating |
| Ares Dynamic Credit |
Eaton Vance and Ares Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Ares Dynamic
The main advantage of trading using opposite Eaton Vance and Ares Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Ares Dynamic 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 Ares Dynamic will offset losses from the drop in Ares Dynamic's long position.| Eaton Vance vs. NXG NextGen Infrastructure | Eaton Vance vs. GAMCO Natural Resources | Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Calamos Global Dynamic |
| Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
Check out your portfolio center.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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