Correlation Between Franklin High and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin High and Eaton Vance 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 Franklin High and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Eaton Vance Limited, you can compare the effects of market volatilities on Franklin High and Eaton Vance 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 Franklin High with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Eaton Vance.
Diversification Opportunities for Franklin High and Eaton Vance
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Eaton is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Eaton Vance Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Limited and Franklin High 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 Franklin High Yield are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Limited has no effect on the direction of Franklin High i.e., Franklin High and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin High and Eaton Vance
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.9 times more return on investment than Eaton Vance. However, Franklin High Yield is 1.11 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Limited is currently generating about -0.02 per unit of risk. If you would invest 869.00 in Franklin High Yield on October 22, 2024 and sell it today you would earn a total of 38.00 from holding Franklin High Yield or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Eaton Vance Limited
Performance |
| Timeline |
| Franklin High Yield |
| Eaton Vance Limited |
Franklin High and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Eaton Vance
The main advantage of trading using opposite Franklin High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Franklin High vs. Rems Real Estate | Franklin High vs. Vy Clarion Real | Franklin High vs. Fidelity Real Estate | Franklin High vs. Tiaa Cref Real Estate |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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