Correlation Between Pimco Corporate and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Pimco Corporate 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 Corporate 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 Corporate Income and Eaton Vance Tax, you can compare the effects of market volatilities on Pimco Corporate 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 Corporate with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Corporate and Eaton Vance.

Diversification Opportunities for Pimco Corporate and Eaton Vance

0.67

Correlation Coefficient

Pimco Corporate  Eaton Vance

Poor diversification

The 3 months correlation between PIMCO and Eaton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Pimco Corporate 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 Corporate Income 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 Tax has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and Eaton Vance go up and down completely randomly.

Pair Corralation between Pimco Corporate and Eaton Vance

Considering the 90-day investment horizon Pimco Corporate Income is expected to generate 0.3 times more return on investment than Eaton Vance. However, Pimco Corporate Income is 3.36 times less risky than Eaton Vance. It trades about 0.36 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.03 per unit of risk. If you would invest  1,394  in Pimco Corporate Income on August 30, 2024 and sell it today you would earn a total of  76.00  from holding Pimco Corporate Income or generate 5.45% return on investment over 90 days.

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

Pimco Corporate Income  vs.  Eaton Vance Tax

Pimco Corporate Income

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Corporate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Tax

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Pimco Corporate and Eaton Vance

The main advantage of trading using opposite Pimco Corporate and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Corporate 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 Corporate Income and Eaton Vance Tax 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.