Correlation Between Eaton Vance and Prudential Short-term
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Prudential Short-term 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 Prudential Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Global and Prudential Short Term Porate, you can compare the effects of market volatilities on Eaton Vance and Prudential Short-term 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 Prudential Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Prudential Short-term.
Diversification Opportunities for Eaton Vance and Prudential Short-term
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Prudential is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Global and Prudential Short Term Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Term 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 Global are associated (or correlated) with Prudential Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Term has no effect on the direction of Eaton Vance i.e., Eaton Vance and Prudential Short-term go up and down completely randomly.
Pair Corralation between Eaton Vance and Prudential Short-term
Assuming the 90 days horizon Eaton Vance Global is expected to generate 0.62 times more return on investment than Prudential Short-term. However, Eaton Vance Global is 1.61 times less risky than Prudential Short-term. It trades about 0.47 of its potential returns per unit of risk. Prudential Short Term Porate is currently generating about 0.23 per unit of risk. If you would invest 847.00 in Eaton Vance Global on November 27, 2024 and sell it today you would earn a total of 7.00 from holding Eaton Vance Global or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Global vs. Prudential Short Term Porate
Performance |
| Timeline |
| Eaton Vance Global |
| Prudential Short Term |
Eaton Vance and Prudential Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Prudential Short-term
The main advantage of trading using opposite Eaton Vance and Prudential Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Prudential Short-term 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 Prudential Short-term will offset losses from the drop in Prudential Short-term's long position.| Eaton Vance vs. Moderate Strategy Fund | Eaton Vance vs. Columbia Moderate Growth | Eaton Vance vs. Hartford Moderate Allocation | Eaton Vance vs. Tiaa Cref Lifestyle Moderate |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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