Correlation Between Eaton Vance and Allianzgi Convertible

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

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

Diversification Opportunities for Eaton Vance and Allianzgi Convertible

0.86

Correlation Coefficient

Eaton Vance  Allianzgi Convertible

Very poor diversification

The 3 months correlation between Eaton and Allianzgi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible 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 Senior are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Eaton Vance i.e., Eaton Vance and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Eaton Vance and Allianzgi Convertible

Considering the 90-day investment horizon Eaton Vance Senior is expected to generate 0.42 times more return on investment than Allianzgi Convertible. However, Eaton Vance Senior is 2.4 times less risky than Allianzgi Convertible. It trades about -0.11 of its potential returns per unit of risk. Allianzgi Convertible Income is currently generating about -0.07 per unit of risk. If you would invest  603.00  in Eaton Vance Senior on December 28, 2024 and sell it today you would lose (18.00) from holding Eaton Vance Senior or give up 2.99% of portfolio value over 90 days.

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

Eaton Vance Senior  vs.  Allianzgi Convertible Income

Eaton Vance Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Allianzgi Convertible

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Convertible Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable fundamental indicators, Allianzgi Convertible is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Eaton Vance and Allianzgi Convertible

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

The idea behind Eaton Vance Senior and Allianzgi Convertible 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.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.