Correlation Between Eaton Vance and Aberdeen Income
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Aberdeen 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 Aberdeen Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Municipal and Aberdeen Income Credit, you can compare the effects of market volatilities on Eaton Vance and Aberdeen 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 Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Aberdeen Income.
Diversification Opportunities for Eaton Vance and Aberdeen Income
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Aberdeen is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit 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 Municipal are associated (or correlated) with Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of Eaton Vance i.e., Eaton Vance and Aberdeen Income go up and down completely randomly.
Pair Corralation between Eaton Vance and Aberdeen Income
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.34 times less return on investment than Aberdeen Income. But when comparing it to its historical volatility, Eaton Vance Municipal is 1.24 times less risky than Aberdeen Income. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Income Credit is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 527.00 in Aberdeen Income Credit on August 31, 2024 and sell it today you would earn a total of 117.00 from holding Aberdeen Income Credit or generate 22.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Aberdeen Income Credit
Performance |
| Timeline |
| Eaton Vance Municipal |
| Aberdeen Income Credit |
Eaton Vance and Aberdeen Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Aberdeen Income
The main advantage of trading using opposite Eaton Vance and Aberdeen Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Aberdeen 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 Aberdeen Income will offset losses from the drop in Aberdeen Income's long position.| Eaton Vance vs. Munivest Fund | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniholdings Closed |
| Aberdeen Income vs. MFS Investment Grade | Aberdeen Income vs. Eaton Vance Municipal | Aberdeen Income vs. DTF Tax Free | Aberdeen Income vs. HUMANA INC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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