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 Short and Pimco Income Fund, 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
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Pimco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Short and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income 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 Short 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 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
Assuming the 90 days horizon Eaton Vance Short is expected to generate 1.05 times more return on investment than Pimco Income. However, Eaton Vance is 1.05 times more volatile than Pimco Income Fund. It trades about 0.22 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.14 per unit of risk. If you would invest 660.00 in Eaton Vance Short on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Eaton Vance Short or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Short vs. Pimco Income Fund
Performance |
| Timeline |
| Eaton Vance Short |
| Pimco Income |
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. Pimco Income Fund | Eaton Vance vs. Pimco Income Fund | Eaton Vance vs. Pimco Incme Fund | Eaton Vance vs. Pimco Income Fund |
| Pimco Income vs. Vanguard Financials Index | Pimco Income vs. Blackrock Financial Institutions | Pimco Income vs. Goldman Sachs Financial | Pimco Income vs. Angel Oak Financial |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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