Correlation Between Eaton Vance and Fidelity Advisor

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

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

Diversification Opportunities for Eaton Vance and Fidelity Advisor

0.91
  Correlation Coefficient
Eaton Vance Floating-Rate
Fidelity Advisor Floating

Almost no diversification

The 3 months correlation between Eaton and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating-Rate and Fidelity Advisor Floating in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Floating has no effect on the direction of Eaton Vance i.e., Eaton Vance and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Eaton Vance and Fidelity Advisor

Assuming the 90 days horizon Eaton Vance is expected to generate 1.13 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Eaton Vance Floating-Rate is 1.11 times less risky than Fidelity Advisor. It trades about 0.03 of its potential returns per unit of risk. Fidelity Advisor Floating is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  950.00  in Fidelity Advisor Floating on October 20, 2021 and sell it today you would earn a total of  1.00  from holding Fidelity Advisor Floating or generate 0.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Eaton Vance Floating-Rate  vs.  Fidelity Advisor Floating

 Performance (%) 
      Timeline 
Eaton Vance Floating-Rate 
Eaton Performance
0 of 100
Over the last 90 days Eaton Vance Floating-Rate has generated negative risk-adjusted returns adding no value to fund investors. 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.
Fidelity Advisor Floating 
Fidelity Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Floating are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance and Fidelity Advisor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Eaton Vance and Fidelity Advisor

The main advantage of trading using opposite Eaton Vance and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.
The idea behind Eaton Vance Floating-Rate and Fidelity Advisor 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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