Correlation Between Floating Rate and Eaton Vance

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

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

Diversification Opportunities for Floating Rate and Eaton Vance

0.98

Correlation Coefficient

Floating Rate  Eaton Vance

Almost no diversification

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

Pair Corralation between Floating Rate and Eaton Vance

Assuming the 90 days horizon Floating Rate is expected to generate 1.14 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Floating Rate Fund is 1.23 times less risky than Eaton Vance. It trades about 0.19 of its potential returns per unit of risk. Eaton Vance Floating Rate is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  834.00  in Eaton Vance Floating Rate on February 7, 2024 and sell it today you would earn a total of  171.00  from holding Eaton Vance Floating Rate or generate 20.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.79%
Values	Daily Returns

Floating Rate Fund  vs.  Eaton Vance Floating Rate

Floating Rate

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Floating Rate Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Floating Rate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Floating

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 13 (%) 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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Floating Rate and Eaton Vance

The main advantage of trading using opposite Floating Rate and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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 Floating Rate Fund and Eaton Vance Floating Rate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..