Correlation Between Eaton Vance and First Trust
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and First Trust 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 First Trust 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 First Trust High, you can compare the effects of market volatilities on Eaton Vance and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and First Trust.
Diversification Opportunities for Eaton Vance and First Trust
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eaton and First is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of Eaton Vance i.e., Eaton Vance and First Trust go up and down completely randomly.
Pair Corralation between Eaton Vance and First Trust
Considering the 90-day investment horizon Eaton Vance Floating is expected to generate 0.66 times more return on investment than First Trust. However, Eaton Vance Floating is 1.52 times less risky than First Trust. It trades about 0.27 of its potential returns per unit of risk. First Trust High is currently generating about 0.11 per unit of risk. If you would invest 1,303 in Eaton Vance Floating on August 28, 2024 and sell it today you would earn a total of 32.00 from holding Eaton Vance Floating or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Floating vs. First Trust High
Performance |
| Timeline |
| Eaton Vance Floating |
| First Trust High |
Eaton Vance and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and First Trust
The main advantage of trading using opposite Eaton Vance and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust'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 |
| First Trust vs. Doubleline Yield Opportunities | First Trust vs. PIMCO Access Income | First Trust vs. Blackrock Innovation Growth | First Trust vs. Cohen Steers Tax Advantaged |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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