Correlation Between Eaton Vance and Putnam Master
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Putnam Master 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 Putnam Master 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 Putnam Master Intermediate, you can compare the effects of market volatilities on Eaton Vance and Putnam Master 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 Putnam Master. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Putnam Master.
Diversification Opportunities for Eaton Vance and Putnam Master
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Putnam is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Putnam Master Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Master Interm 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 Putnam Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Master Interm has no effect on the direction of Eaton Vance i.e., Eaton Vance and Putnam Master go up and down completely randomly.
Pair Corralation between Eaton Vance and Putnam Master
Considering the 90-day investment horizon Eaton Vance National is expected to generate 0.8 times more return on investment than Putnam Master. However, Eaton Vance National is 1.25 times less risky than Putnam Master. It trades about -0.13 of its potential returns per unit of risk. Putnam Master Intermediate is currently generating about -0.16 per unit of risk. If you would invest 1,748 in Eaton Vance National on August 24, 2024 and sell it today you would lose (22.00) from holding Eaton Vance National or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. Putnam Master Intermediate
Performance |
| Timeline |
| Eaton Vance National |
| Putnam Master Interm |
Eaton Vance and Putnam Master Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Putnam Master
The main advantage of trading using opposite Eaton Vance and Putnam Master positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Putnam Master 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 Putnam Master will offset losses from the drop in Putnam Master'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 |
| Putnam Master vs. MFS High Income | Putnam Master vs. MFS Investment Grade | Putnam Master vs. Eaton Vance National | Putnam Master vs. Invesco High 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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