Correlation Between Franklin Templeton and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton 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 Templeton 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 Templeton Limited and Eaton Vance Risk, you can compare the effects of market volatilities on Franklin Templeton 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 Templeton with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Eaton Vance.
Diversification Opportunities for Franklin Templeton and Eaton Vance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Eaton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk and Franklin Templeton 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 Templeton Limited 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 Risk has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin Templeton and Eaton Vance
Considering the 90-day investment horizon Franklin Templeton is expected to generate 1.12 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Franklin Templeton Limited is 1.21 times less risky than Eaton Vance. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Risk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 713.00 in Eaton Vance Risk on September 1, 2024 and sell it today you would earn a total of 228.00 from holding Eaton Vance Risk or generate 31.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. Eaton Vance Risk
Performance |
| Timeline |
| Franklin Templeton |
| Eaton Vance Risk |
Franklin Templeton and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Eaton Vance
The main advantage of trading using opposite Franklin Templeton and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton 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 Templeton vs. MFS Investment Grade | Franklin Templeton vs. Invesco High Income | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome |
| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax Managed | Eaton Vance vs. Eaton Vance Tax |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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