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 Affiliated and Eaton Vance Tax Managed, 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
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Eaton is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated 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 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 Affiliated 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 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 Affiliated is expected to generate 1.23 times more return on investment than Eaton Vance. However, Lord Abbett is 1.23 times more volatile than Eaton Vance Tax Managed. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Tax Managed is currently generating about 0.04 per unit of risk. If you would invest 2,014 in Lord Abbett Affiliated on August 25, 2024 and sell it today you would earn a total of 43.00 from holding Lord Abbett Affiliated or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Eaton Vance Tax Managed
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Eaton Vance Tax |
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. Fundvantage Trust | Lord Abbett vs. Rationalpier 88 Convertible | Lord Abbett vs. Gmo Emerging Country | Lord Abbett vs. Rbc Bluebay Global |
| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Risk | 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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