Correlation Between Eaton Vance and First Trust
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Senior and First Trust Senior, you can compare the effects of market volatilities on Eaton Vance and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and First Trust.
Diversification Opportunities for Eaton Vance and First Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior 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 Senior are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of Eaton Vance i.e., Eaton Vance and First Trust go up and down completely randomly.
Pair Corralation between Eaton Vance and First Trust
Considering the 90-day investment horizon Eaton Vance Senior is expected to generate 1.93 times more return on investment than First Trust. However, Eaton Vance is 1.93 times more volatile than First Trust Senior. It trades about 0.07 of its potential returns per unit of risk. First Trust Senior is currently generating about 0.09 per unit of risk. If you would invest 436.00 in Eaton Vance Senior on August 24, 2024 and sell it today you would earn a total of 188.00 from holding Eaton Vance Senior or generate 43.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Senior vs. First Trust Senior
Performance |
| Timeline |
| Eaton Vance Senior |
| First Trust Senior |
Eaton Vance and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and First Trust
The main advantage of trading using opposite Eaton Vance and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select |
| First Trust vs. Blackstone Gso Long | First Trust vs. Eaton Vance Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global |
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 CEOs Directory module to screen CEOs from public companies around the world.
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