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 High and Western Asset Diversified, 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
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eaton and Western is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance High and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 High 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 Diversified 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 High is expected to generate 0.6 times more return on investment than Western Asset. However, Eaton Vance High is 1.66 times less risky than Western Asset. It trades about 0.2 of its potential returns per unit of risk. Western Asset Diversified is currently generating about 0.08 per unit of risk. If you would invest 422.00 in Eaton Vance High on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Eaton Vance High or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance High vs. Western Asset Diversified
Performance |
| Timeline |
| Eaton Vance High |
| Western Asset Diversified |
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. Western Asset Diversified | Eaton Vance vs. Blackrock Conservative Prprdptfinstttnl | Eaton Vance vs. American Funds Conservative | Eaton Vance vs. Aqr Diversified Arbitrage |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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