Correlation Between PGIM Emerging and Eaton Vance

By analyzing existing cross correlation between PGIM Emerging Markets and Eaton Vance Emerging, you can compare the effects of market volatilities on PGIM Emerging 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 PGIM Emerging with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Emerging and Eaton Vance.

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

Diversification Opportunities for PGIM Emerging and Eaton Vance

0.98
  Correlation Coefficient
PGIM Emerging Markets
Eaton Vance Emerging

Almost no diversification

The 3 months correlation between EMDAX and Eaton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Emerging Markets and Eaton Vance Emerging in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Emerging and PGIM Emerging 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 PGIM Emerging Markets 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 Emerging has no effect on the direction of PGIM Emerging i.e., PGIM Emerging and Eaton Vance go up and down completely randomly.

Pair Corralation between PGIM Emerging and Eaton Vance

Assuming the 90 days horizon PGIM Emerging Markets is expected to generate 1.1 times more return on investment than Eaton Vance. However, PGIM Emerging is 1.1 times more volatile than Eaton Vance Emerging. It trades about -0.02 of its potential returns per unit of risk. Eaton Vance Emerging is currently generating about -0.03 per unit of risk. If you would invest  573.00  in PGIM Emerging Markets on October 19, 2021 and sell it today you would lose (41.00)  from holding PGIM Emerging Markets or give up 7.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

PGIM Emerging Markets  vs.  Eaton Vance Emerging

 Performance (%) 
      Timeline 
PGIM Emerging Markets 
EMDAX Performance
0 of 100
Over the last 90 days PGIM Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, PGIM Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Eaton Vance Emerging 
Eaton Performance
0 of 100
Over the last 90 days Eaton Vance Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PGIM Emerging and Eaton Vance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with PGIM Emerging and Eaton Vance

The main advantage of trading using opposite PGIM Emerging and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Emerging 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.
The idea behind PGIM Emerging Markets and Eaton Vance Emerging 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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