Correlation Between Eaton Vance and Jpmorgan Core

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

By analyzing existing cross correlation between Eaton Vance Income and Jpmorgan E Bond, you can compare the effects of market volatilities on Eaton Vance and Jpmorgan Core 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 Jpmorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Jpmorgan Core.

Diversification Opportunities for Eaton Vance and Jpmorgan Core

0.74

Correlation Coefficient

Eaton Vance  Jpmorgan Core

Poor diversification

The 3 months correlation between Eaton and Jpmorgan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Income and Jpmorgan E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Bond 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 Income are associated (or correlated) with Jpmorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Bond has no effect on the direction of Eaton Vance i.e., Eaton Vance and Jpmorgan Core go up and down completely randomly.

Pair Corralation between Eaton Vance and Jpmorgan Core

Assuming the 90 days horizon Eaton Vance is expected to generate 2.2 times less return on investment than Jpmorgan Core. But when comparing it to its historical volatility, Eaton Vance Income is 1.29 times less risky than Jpmorgan Core. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan E Bond is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,006  in Jpmorgan E Bond on December 29, 2024 and sell it today you would earn a total of  22.00  from holding Jpmorgan E Bond or generate 2.19% return on investment over 90 days.

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

Eaton Vance Income  vs.  Jpmorgan E Bond

Eaton Vance Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan E Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan E Bond are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Jpmorgan Core

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

The idea behind Eaton Vance Income and Jpmorgan E Bond 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.