Correlation Between Franklin Moderate and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin Moderate 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 Moderate 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 Moderate Allocation and Eaton Vance Floating Rate, you can compare the effects of market volatilities on Franklin Moderate 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 Moderate with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Moderate and Eaton Vance.
Diversification Opportunities for Franklin Moderate and Eaton Vance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Eaton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Moderate Allocation and Eaton Vance Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Floating and Franklin Moderate 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 Moderate Allocation 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 Floating has no effect on the direction of Franklin Moderate i.e., Franklin Moderate and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin Moderate and Eaton Vance
Assuming the 90 days horizon Franklin Moderate Allocation is expected to generate 2.83 times more return on investment than Eaton Vance. However, Franklin Moderate is 2.83 times more volatile than Eaton Vance Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Eaton Vance Floating Rate is currently generating about 0.18 per unit of risk. If you would invest 1,302 in Franklin Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 327.00 from holding Franklin Moderate Allocation or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Moderate Allocation vs. Eaton Vance Floating Rate
Performance |
| Timeline |
| Franklin Moderate |
| Eaton Vance Floating |
Franklin Moderate and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Moderate and Eaton Vance
The main advantage of trading using opposite Franklin Moderate and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Moderate 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 Moderate vs. Jennison Natural Resources | Franklin Moderate vs. Oil Gas Ultrasector | Franklin Moderate vs. Clearbridge Energy Mlp | Franklin Moderate vs. Alpsalerian Energy Infrastructure |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |