Correlation Between Eaton Vance and Prudential Real

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

Diversification Opportunities for Eaton Vance and Prudential Real

-0.46

Correlation Coefficient

Eaton Vance  Prudential Real

Very good diversification

The 3 months correlation between Eaton and Prudential is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating Rate and Prudential Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Real Estate 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 Prudential Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Real Estate has no effect on the direction of Eaton Vance i.e., Eaton Vance and Prudential Real go up and down completely randomly.

Pair Corralation between Eaton Vance and Prudential Real

Assuming the 90 days horizon Eaton Vance Floating Rate is expected to generate 0.15 times more return on investment than Prudential Real. However, Eaton Vance Floating Rate is 6.7 times less risky than Prudential Real. It trades about 0.25 of its potential returns per unit of risk. Prudential Real Estate is currently generating about -0.08 per unit of risk. If you would invest  980.00  in Eaton Vance Floating Rate on October 23, 2024 and sell it today you would earn a total of  23.00  from holding Eaton Vance Floating Rate or generate 2.35% return on investment over 90 days.

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

Eaton Vance Floating Rate  vs.  Prudential Real Estate

Eaton Vance Floating

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating Rate are ranked lower than 19 (%) 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.

Prudential Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Prudential Real

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

The idea behind Eaton Vance Floating Rate and Prudential Real Estate 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.