Correlation Between Eaton Vance and Putnam High
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Putnam High 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 High 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 Putnam High Income, you can compare the effects of market volatilities on Eaton Vance and Putnam High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Putnam High.
Diversification Opportunities for Eaton Vance and Putnam High
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Putnam is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High 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 Senior are associated (or correlated) with Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and Putnam High go up and down completely randomly.
Pair Corralation between Eaton Vance and Putnam High
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.31 times less return on investment than Putnam High. But when comparing it to its historical volatility, Eaton Vance Senior is 1.03 times less risky than Putnam High. It trades about 0.2 of its potential returns per unit of risk. Putnam High Income is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 664.00 in Putnam High Income on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Putnam High Income or generate 2.56% 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. Putnam High Income
Performance |
| Timeline |
| Eaton Vance Senior |
| Putnam High Income |
Eaton Vance and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Putnam High
The main advantage of trading using opposite Eaton Vance and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Putnam High 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 High will offset losses from the drop in Putnam High'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 |
| Putnam High vs. RiverNorthDoubleLine Strategic Opportunity | Putnam High vs. Cornerstone Strategic Return | Putnam High vs. Oxford Lane Capital | Putnam High vs. Horizon Technology Finance |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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