Correlation Between L Abbett and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both L Abbett 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 L Abbett and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Growth and Eaton Vance Tax Managed, you can compare the effects of market volatilities on L Abbett 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 L Abbett with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Eaton Vance.
Diversification Opportunities for L Abbett and Eaton Vance
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between LGLSX and Eaton is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Eaton Vance Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and L Abbett 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 L Abbett Growth 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 Tax has no effect on the direction of L Abbett i.e., L Abbett and Eaton Vance go up and down completely randomly.
Pair Corralation between L Abbett and Eaton Vance
Assuming the 90 days horizon L Abbett Growth is expected to generate 2.11 times more return on investment than Eaton Vance. However, L Abbett is 2.11 times more volatile than Eaton Vance Tax Managed. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Tax Managed is currently generating about 0.16 per unit of risk. If you would invest 4,744 in L Abbett Growth on October 20, 2024 and sell it today you would earn a total of 149.00 from holding L Abbett Growth or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Eaton Vance Tax Managed
Performance |
| Timeline |
| L Abbett Growth |
| Eaton Vance Tax |
L Abbett and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Eaton Vance
The main advantage of trading using opposite L Abbett and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett 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.| L Abbett vs. Dreyfusstandish Global Fixed | L Abbett vs. Rbc Ultra Short Fixed | L Abbett vs. Multisector Bond Sma | L Abbett vs. Dreyfusstandish Global Fixed |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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