Correlation Between Eaton Vance and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Worldwide and Lord Abbett Mid, you can compare the effects of market volatilities on Eaton Vance and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Lord Abbett.
Diversification Opportunities for Eaton Vance and Lord Abbett
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and Lord is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Worldwide and Lord Abbett Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Mid 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 Worldwide are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Mid has no effect on the direction of Eaton Vance i.e., Eaton Vance and Lord Abbett go up and down completely randomly.
Pair Corralation between Eaton Vance and Lord Abbett
Assuming the 90 days horizon Eaton Vance is expected to generate 1.48 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Eaton Vance Worldwide is 1.28 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Mid is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,714 in Lord Abbett Mid on December 2, 2024 and sell it today you would earn a total of 702.00 from holding Lord Abbett Mid or generate 25.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Worldwide vs. Lord Abbett Mid
Performance |
| Timeline |
| Eaton Vance Worldwide |
| Lord Abbett Mid |
Eaton Vance and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Lord Abbett
The main advantage of trading using opposite Eaton Vance and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Eaton Vance vs. Invesco Global Health | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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