Correlation Between Eaton Vance and Franklin Universal

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

By analyzing existing cross correlation between Eaton Vance Floating and Franklin Universal Closed, you can compare the effects of market volatilities on Eaton Vance and Franklin Universal 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 Franklin Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Franklin Universal.

Diversification Opportunities for Eaton Vance and Franklin Universal

0.08

Correlation Coefficient

Eaton Vance  Franklin Universal

Significant diversification

The 3 months correlation between Eaton and Franklin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and Franklin Universal Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Universal Closed 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 are associated (or correlated) with Franklin Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Universal Closed has no effect on the direction of Eaton Vance i.e., Eaton Vance and Franklin Universal go up and down completely randomly.

Pair Corralation between Eaton Vance and Franklin Universal

Considering the 90-day investment horizon Eaton Vance Floating is expected to under-perform the Franklin Universal. In addition to that, Eaton Vance is 1.07 times more volatile than Franklin Universal Closed. It trades about -0.11 of its total potential returns per unit of risk. Franklin Universal Closed is currently generating about 0.12 per unit of volatility. If you would invest  722.00  in Franklin Universal Closed on December 25, 2024 and sell it today you would earn a total of  29.00  from holding Franklin Universal Closed or generate 4.02% return on investment over 90 days.

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

Eaton Vance Floating  vs.  Franklin Universal Closed

Eaton Vance Floating

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Floating has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Franklin Universal Closed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Universal Closed are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin Universal is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eaton Vance and Franklin Universal

The main advantage of trading using opposite Eaton Vance and Franklin Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Franklin Universal 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 Franklin Universal will offset losses from the drop in Franklin Universal's long position.

The idea behind Eaton Vance Floating and Franklin Universal Closed 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.