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 National and Western Asset Global, 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
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eaton and Western is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 National 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 Global 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
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Western Asset. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 1.61 times less risky than Western Asset. The stock trades about -0.21 of its potential returns per unit of risk. The Western Asset Global is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Western Asset Global on August 28, 2024 and sell it today you would lose (11.00) from holding Western Asset Global or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eaton Vance National vs. Western Asset Global
Performance |
| Timeline |
| Eaton Vance National |
| Western Asset Global |
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. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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