Correlation Between Armada Hflr and Eaton Vance

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

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

Diversification Opportunities for Armada Hflr and Eaton Vance

-0.35

Correlation Coefficient

Armada Hflr  Eaton Vance

Very good diversification

The 3 months correlation between Armada and Eaton is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr 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 Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and Eaton Vance go up and down completely randomly.

Pair Corralation between Armada Hflr and Eaton Vance

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Eaton Vance. In addition to that, Armada Hflr is 21.23 times more volatile than Eaton Vance Floating Rate. It trades about -0.27 of its total potential returns per unit of risk. Eaton Vance Floating Rate is currently generating about -0.08 per unit of volatility. If you would invest  1,003  in Eaton Vance Floating Rate on September 27, 2024 and sell it today you would lose (1.00) from holding Eaton Vance Floating Rate or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Eaton Vance Floating Rate

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Eaton Vance Floating

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 16 (%) 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.

Pair Trading with Armada Hflr and Eaton Vance

The main advantage of trading using opposite Armada Hflr and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.