Correlation Between Franklin Arizona and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin Arizona 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 Arizona 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 Arizona Tax Free and Eaton Vance Arizona, you can compare the effects of market volatilities on Franklin Arizona 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 Arizona with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Arizona and Eaton Vance.
Diversification Opportunities for Franklin Arizona and Eaton Vance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Eaton is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Arizona Tax Free and Eaton Vance Arizona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Arizona and Franklin Arizona 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 Arizona Tax Free 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 Arizona has no effect on the direction of Franklin Arizona i.e., Franklin Arizona and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin Arizona and Eaton Vance
Assuming the 90 days horizon Franklin Arizona is expected to generate 1.24 times less return on investment than Eaton Vance. In addition to that, Franklin Arizona is 1.02 times more volatile than Eaton Vance Arizona. It trades about 0.1 of its total potential returns per unit of risk. Eaton Vance Arizona is currently generating about 0.13 per unit of volatility. If you would invest 897.00 in Eaton Vance Arizona on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Eaton Vance Arizona or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Arizona Tax Free vs. Eaton Vance Arizona
Performance |
| Timeline |
| Franklin Arizona Tax |
| Eaton Vance Arizona |
Franklin Arizona and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Arizona and Eaton Vance
The main advantage of trading using opposite Franklin Arizona and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Arizona 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 Arizona vs. Franklin Mutual Beacon | Franklin Arizona vs. Templeton Developing Markets | Franklin Arizona vs. Franklin Mutual Global | Franklin Arizona vs. Franklin Mutual Global |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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