Correlation Between Eaton Vance and Pimco Emerging
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Pimco Emerging 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 Eaton Vance and Pimco Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Emerging and Pimco Emerging Local, you can compare the effects of market volatilities on Eaton Vance and Pimco Emerging 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 Eaton Vance with a short position of Pimco Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Pimco Emerging.
Diversification Opportunities for Eaton Vance and Pimco Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Pimco is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Emerging and Pimco Emerging Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Emerging Local and Eaton Vance 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 Eaton Vance Emerging are associated (or correlated) with Pimco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Emerging Local has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pimco Emerging go up and down completely randomly.
Pair Corralation between Eaton Vance and Pimco Emerging
Assuming the 90 days horizon Eaton Vance Emerging is expected to under-perform the Pimco Emerging. In addition to that, Eaton Vance is 1.12 times more volatile than Pimco Emerging Local. It trades about -0.15 of its total potential returns per unit of risk. Pimco Emerging Local is currently generating about -0.16 per unit of volatility. If you would invest 584.00 in Pimco Emerging Local on January 17, 2024 and sell it today you would lose (8.00) from holding Pimco Emerging Local or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Emerging vs. Pimco Emerging Local
Performance |
| Timeline |
| Eaton Vance Emerging |
| Pimco Emerging Local |
Eaton Vance and Pimco Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Pimco Emerging
The main advantage of trading using opposite Eaton Vance and Pimco Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pimco Emerging 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 Pimco Emerging will offset losses from the drop in Pimco Emerging's long position.| Eaton Vance vs. Eaton Vance Emerging | Eaton Vance vs. Eaton Vance Global | Eaton Vance vs. Eaton Vance Floating Rate | Eaton Vance vs. Eaton Vance Global |
| Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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