Correlation Between Eaton Vance and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Pimco Income 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 Pimco Income 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 Pimco Income Strategy, you can compare the effects of market volatilities on Eaton Vance and Pimco Income 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 Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Pimco Income.
Diversification Opportunities for Eaton Vance and Pimco Income
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and Pimco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy 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 Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pimco Income go up and down completely randomly.
Pair Corralation between Eaton Vance and Pimco Income
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Pimco Income. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 1.13 times less risky than Pimco Income. The stock trades about -0.24 of its potential returns per unit of risk. The Pimco Income Strategy is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 847.00 in Pimco Income Strategy on August 25, 2024 and sell it today you would lose (6.00) from holding Pimco Income Strategy or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. Pimco Income Strategy
Performance |
| Timeline |
| Eaton Vance National |
| Pimco Income Strategy |
Eaton Vance and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Pimco Income
The main advantage of trading using opposite Eaton Vance and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pimco Income 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Federated Premier Municipal |
| Pimco Income vs. MFS Investment Grade | Pimco Income vs. Invesco High Income | Pimco Income vs. Eaton Vance National | Pimco Income vs. Nuveen California Select |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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