Correlation Between Eaton Vance and Credit Suisse

Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Credit Suisse 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 Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eaton Vance Floating Rate and Credit Suisse Floating, you can compare the effects of market volatilities on Eaton Vance and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Credit Suisse.

Diversification Opportunities for Eaton Vance and Credit Suisse

0.69

Correlation Coefficient

Eaton Vance  Credit Suisse

Poor diversification

The 1 month correlation between Eaton and Credit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating 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 Floating Rate are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Floating has no effect on the direction of Eaton Vance i.e., Eaton Vance and Credit Suisse go up and down completely randomly.

Pair Corralation between Eaton Vance and Credit Suisse

Assuming the 90 days horizon Eaton Vance is expected to generate 1.05 times less return on investment than Credit Suisse. But when comparing it to its historical volatility, Eaton Vance Floating Rate is 1.01 times less risky than Credit Suisse. It trades about 0.11 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  562.00  in Credit Suisse Floating on January 17, 2024 and sell it today you would earn a total of  76.00  from holding Credit Suisse Floating or generate 13.52% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Eaton Vance Floating Rate  vs.  Credit Suisse Floating

Eaton Vance Floating

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Credit Suisse Floating

Risk-Adjusted Performance

6 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Floating are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Credit Suisse

The main advantage of trading using opposite Eaton Vance and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.

The idea behind Eaton Vance Floating Rate and Credit Suisse Floating pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.