Correlation Between Eaton Vance and Pimco Diversified

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Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Pimco Diversified 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 Pimco Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Floating Rate and Pimco Diversified Income, you can compare the effects of market volatilities on Eaton Vance and Pimco Diversified 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 Pimco Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Pimco Diversified.

Diversification Opportunities for Eaton Vance and Pimco Diversified

EatonPimcoDiversified AwayEatonPimcoDiversified Away100%
-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Eaton and Pimco is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Pimco Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Diversified Income 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 Pimco Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Diversified Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pimco Diversified go up and down completely randomly.

Pair Corralation between Eaton Vance and Pimco Diversified

Assuming the 90 days horizon Eaton Vance Floating Rate is expected to generate 0.61 times more return on investment than Pimco Diversified. However, Eaton Vance Floating Rate is 1.63 times less risky than Pimco Diversified. It trades about 0.24 of its potential returns per unit of risk. Pimco Diversified Income is currently generating about -0.01 per unit of risk. If you would invest  986.00  in Eaton Vance Floating Rate on September 18, 2024 and sell it today you would earn a total of  19.00  from holding Eaton Vance Floating Rate or generate 1.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eaton Vance Floating Rate  vs.  Pimco Diversified Income

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -0.50.00.51.01.5
JavaScript chart by amCharts 3.21.15EAFAX PDNIX
       Timeline  
Eaton Vance Floating 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 18 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.859.99.951010.05
Pimco Diversified Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pimco Diversified Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Pimco Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.659.79.759.8

Eaton Vance and Pimco Diversified Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.26-0.0945-0.0635-0.0325-0.0017490.030.06470.09970.290.49 510152025
JavaScript chart by amCharts 3.21.15EAFAX PDNIX
       Returns  

Pair Trading with Eaton Vance and Pimco Diversified

The main advantage of trading using opposite Eaton Vance and Pimco Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pimco Diversified 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 Pimco Diversified will offset losses from the drop in Pimco Diversified's long position.
The idea behind Eaton Vance Floating Rate and Pimco Diversified Income 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 the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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