Correlation Between Enhanced Fixed and Eaton Vance

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

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

Diversification Opportunities for Enhanced Fixed and Eaton Vance

0.27

Correlation Coefficient

Enhanced Fixed  Eaton Vance

Modest diversification

The 3 months correlation between Enhanced and Eaton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Fixed Income and Eaton Vance Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Val and Enhanced Fixed 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 Enhanced Fixed Income 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 Val has no effect on the direction of Enhanced Fixed i.e., Enhanced Fixed and Eaton Vance go up and down completely randomly.

Pair Corralation between Enhanced Fixed and Eaton Vance

Assuming the 90 days horizon Enhanced Fixed Income is expected to generate 0.37 times more return on investment than Eaton Vance. However, Enhanced Fixed Income is 2.67 times less risky than Eaton Vance. It trades about 0.14 of its potential returns per unit of risk. Eaton Vance Val is currently generating about 0.0 per unit of risk. If you would invest  994.00  in Enhanced Fixed Income on December 20, 2024 and sell it today you would earn a total of  24.00  from holding Enhanced Fixed Income or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Enhanced Fixed Income  vs.  Eaton Vance Val

Enhanced Fixed Income

Risk-Adjusted Performance

Good

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

Eaton Vance Val

Risk-Adjusted Performance

Weak

Over the last 90 days Eaton Vance Val 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.

Pair Trading with Enhanced Fixed and Eaton Vance

The main advantage of trading using opposite Enhanced Fixed and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced Fixed 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 Enhanced Fixed Income and Eaton Vance Val 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.