Correlation Between Invesco High and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Invesco 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 Invesco 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 Invesco High Income and Eaton Vance Senior, you can compare the effects of market volatilities on Invesco 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 Invesco High with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Eaton Vance.
Diversification Opportunities for Invesco High and Eaton Vance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Eaton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and Invesco 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 Invesco High Income 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 Senior has no effect on the direction of Invesco High i.e., Invesco High and Eaton Vance go up and down completely randomly.
Pair Corralation between Invesco High and Eaton Vance
Given the investment horizon of 90 days Invesco High is expected to generate 1.97 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Invesco High Income is 4.14 times less risky than Eaton Vance. It trades about 0.29 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 617.00 in Eaton Vance Senior on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Eaton Vance Senior or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. Eaton Vance Senior
Performance |
| Timeline |
| Invesco High Income |
| Eaton Vance Senior |
Invesco High and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Eaton Vance
The main advantage of trading using opposite Invesco High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco 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.| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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