Correlation Between Lord Abbett and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Lord 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 Lord 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 Lord Abbett Diversified and Eaton Vance Large Cap, you can compare the effects of market volatilities on Lord 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 Lord Abbett with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Eaton Vance.
Diversification Opportunities for Lord Abbett and Eaton Vance
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Eaton is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Eaton Vance Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Large and Lord 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 Lord Abbett Diversified 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 Large has no effect on the direction of Lord Abbett i.e., Lord Abbett and Eaton Vance go up and down completely randomly.
Pair Corralation between Lord Abbett and Eaton Vance
Assuming the 90 days horizon Lord Abbett is expected to generate 1.07 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Lord Abbett Diversified is 2.17 times less risky than Eaton Vance. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Large Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,329 in Eaton Vance Large Cap on August 29, 2024 and sell it today you would earn a total of 479.00 from holding Eaton Vance Large Cap or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Eaton Vance Large Cap
Performance |
| Timeline |
| Lord Abbett Diversified |
| Eaton Vance Large |
Lord Abbett and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Eaton Vance
The main advantage of trading using opposite Lord Abbett and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord 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.| Lord Abbett vs. Guggenheim Diversified Income | Lord Abbett vs. Fidelity Advisor Diversified | Lord Abbett vs. Small Cap Stock | Lord Abbett vs. Western Asset Diversified |
| Eaton Vance vs. Dodge Cox Stock | Eaton Vance vs. American Mutual Fund | Eaton Vance vs. American Funds American | Eaton Vance vs. American Funds American |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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