Correlation Between Pioneer Floating and Eaton Vance

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

By analyzing existing cross correlation between Pioneer Floating Rate and Eaton Vance Senior, you can compare the effects of market volatilities on Pioneer Floating and Eaton Vance 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 Pioneer Floating with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Floating and Eaton Vance.

Diversification Opportunities for Pioneer Floating and Eaton Vance

0.7

Correlation Coefficient

Pioneer Floating  Eaton Vance

Poor diversification

The 3 months correlation between Pioneer and Eaton is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Floating Rate and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and Pioneer Floating 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 Pioneer Floating Rate are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Senior has no effect on the direction of Pioneer Floating i.e., Pioneer Floating and Eaton Vance go up and down completely randomly.

Pair Corralation between Pioneer Floating and Eaton Vance

Considering the 90-day investment horizon Pioneer Floating Rate is expected to generate 0.68 times more return on investment than Eaton Vance. However, Pioneer Floating Rate is 1.48 times less risky than Eaton Vance. It trades about -0.03 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about -0.13 per unit of risk. If you would invest  949.00  in Pioneer Floating Rate on December 28, 2024 and sell it today you would lose (6.00) from holding Pioneer Floating Rate or give up 0.63% of portfolio value over 90 days.

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

Pioneer Floating Rate  vs.  Eaton Vance Senior

Pioneer Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Pioneer Floating is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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. Even with relatively invariable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pioneer Floating and Eaton Vance

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

The idea behind Pioneer Floating Rate and Eaton Vance Senior 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.