Correlation Between Eaton Vance and Western Asset
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Municipal and Western Asset Inflation, you can compare the effects of market volatilities on Eaton Vance and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Western Asset.
Diversification Opportunities for Eaton Vance and Western Asset
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Western is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Municipal are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Eaton Vance i.e., Eaton Vance and Western Asset go up and down completely randomly.
Pair Corralation between Eaton Vance and Western Asset
Assuming the 90 days horizon Eaton Vance Municipal is expected to generate 0.57 times more return on investment than Western Asset. However, Eaton Vance Municipal is 1.76 times less risky than Western Asset. It trades about 0.08 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.02 per unit of risk. If you would invest 1,059 in Eaton Vance Municipal on September 5, 2024 and sell it today you would earn a total of 94.00 from holding Eaton Vance Municipal or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Western Asset Inflation
Performance |
| Timeline |
| Eaton Vance Municipal |
| Western Asset Inflation |
Eaton Vance and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Western Asset
The main advantage of trading using opposite Eaton Vance and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Mbf | Eaton Vance vs. Eaton Vance New |
| Western Asset vs. Multisector Bond Sma | Western Asset vs. T Rowe Price | Western Asset vs. Legg Mason Partners | Western Asset vs. Bbh Intermediate Municipal |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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