Correlation Between Eaton Vance and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Lord Abbett 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 Lord Abbett 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 Lord Abbett Diversified, you can compare the effects of market volatilities on Eaton Vance and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Lord Abbett.

Diversification Opportunities for Eaton Vance and Lord Abbett

0.35

Correlation Coefficient

Eaton Vance  Lord Abbett

Weak diversification

The 3 months correlation between Eaton and Lord is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Diversified has no effect on the direction of Eaton Vance i.e., Eaton Vance and Lord Abbett go up and down completely randomly.

Pair Corralation between Eaton Vance and Lord Abbett

Assuming the 90 days horizon Eaton Vance Floating Rate is expected to generate 0.14 times more return on investment than Lord Abbett. However, Eaton Vance Floating Rate is 7.22 times less risky than Lord Abbett. It trades about -0.08 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about -0.35 per unit of risk. If you would invest  1,004  in Eaton Vance Floating Rate on October 7, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eaton Vance Floating Rate  vs.  Lord Abbett Diversified

Eaton Vance Floating

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 14 (%) 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.

Lord Abbett Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Lord Abbett 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 Lord Abbett

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

The idea behind Eaton Vance Floating Rate and Lord Abbett Diversified 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.