Correlation Between Franklin Real and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin Real 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 Real 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 Real Estate and Eaton Vance Core, you can compare the effects of market volatilities on Franklin Real 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 Real with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Eaton Vance.
Diversification Opportunities for Franklin Real and Eaton Vance
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Eaton is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Eaton Vance Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Core and Franklin Real 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 Real Estate 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 Core has no effect on the direction of Franklin Real i.e., Franklin Real and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin Real and Eaton Vance
Assuming the 90 days horizon Franklin Real Estate is expected to generate 2.84 times more return on investment than Eaton Vance. However, Franklin Real is 2.84 times more volatile than Eaton Vance Core. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Core is currently generating about 0.08 per unit of risk. If you would invest 1,946 in Franklin Real Estate on August 30, 2024 and sell it today you would earn a total of 52.00 from holding Franklin Real Estate or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin Real Estate vs. Eaton Vance Core
Performance |
| Timeline |
| Franklin Real Estate |
| Eaton Vance Core |
Franklin Real and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Eaton Vance
The main advantage of trading using opposite Franklin Real and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real 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 Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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