Correlation Between Pimco Mortgage and Eaton Vance

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

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

Diversification Opportunities for Pimco Mortgage and Eaton Vance

-0.09

Correlation Coefficient

Pimco Mortgage  Eaton Vance

Good diversification

The 3 months correlation between Pimco and Eaton is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Mortgage Opportunities and Eaton Vance Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Global and Pimco Mortgage 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 Pimco Mortgage Opportunities 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 Global has no effect on the direction of Pimco Mortgage i.e., Pimco Mortgage and Eaton Vance go up and down completely randomly.

Pair Corralation between Pimco Mortgage and Eaton Vance

Assuming the 90 days horizon Pimco Mortgage Opportunities is expected to generate 0.68 times more return on investment than Eaton Vance. However, Pimco Mortgage Opportunities is 1.48 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Global is currently generating about 0.05 per unit of risk. If you would invest  865.00  in Pimco Mortgage Opportunities on October 4, 2024 and sell it today you would earn a total of  57.00  from holding Pimco Mortgage Opportunities or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Pimco Mortgage Opportunities  vs.  Eaton Vance Global

Pimco Mortgage Oppor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eaton Vance Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Global has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Pimco Mortgage and Eaton Vance

The main advantage of trading using opposite Pimco Mortgage and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Mortgage 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 Pimco Mortgage Opportunities and Eaton Vance Global 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.