Correlation Between Floating Rate and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Floating Rate 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 Floating Rate and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Eaton Vance Floating Rate, you can compare the effects of market volatilities on Floating Rate 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 Floating Rate with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Eaton Vance.
Diversification Opportunities for Floating Rate and Eaton Vance
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Floating and Eaton is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund 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 Floating Rate 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 Floating Rate Fund 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 Floating Rate i.e., Floating Rate and Eaton Vance go up and down completely randomly.
Pair Corralation between Floating Rate and Eaton Vance
Assuming the 90 days horizon Floating Rate is expected to generate 1.31 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Floating Rate Fund is 1.18 times less risky than Eaton Vance. It trades about 0.25 of its potential returns per unit of risk. Eaton Vance Floating Rate is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 994.00 in Eaton Vance Floating Rate on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Eaton Vance Floating Rate or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Eaton Vance Floating Rate
Performance |
| Timeline |
| Floating Rate |
| Eaton Vance Floating |
Floating Rate and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Eaton Vance
The main advantage of trading using opposite Floating Rate and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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.| Floating Rate vs. Calvert Moderate Allocation | Floating Rate vs. Wisdomtree Siegel Moderate | Floating Rate vs. Jp Morgan Smartretirement | Floating Rate vs. Saat Moderate Strategy |
| Eaton Vance vs. Touchstone Small Cap | Eaton Vance vs. Small Cap Growth | Eaton Vance vs. Kinetics Small Cap | Eaton Vance vs. Ab Small Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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