Correlation Between Ishares Municipal and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal 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 Ishares Municipal and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Eaton Vance Msschsts, you can compare the effects of market volatilities on Ishares Municipal 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 Ishares Municipal with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Eaton Vance.
Diversification Opportunities for Ishares Municipal and Eaton Vance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ishares and Eaton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Eaton Vance Msschsts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Msschsts and Ishares Municipal 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 Ishares Municipal Bond 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 Msschsts has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Eaton Vance go up and down completely randomly.
Pair Corralation between Ishares Municipal and Eaton Vance
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 1.98 times more return on investment than Eaton Vance. However, Ishares Municipal is 1.98 times more volatile than Eaton Vance Msschsts. It trades about 0.48 of its potential returns per unit of risk. Eaton Vance Msschsts is currently generating about 0.58 per unit of risk. If you would invest 1,105 in Ishares Municipal Bond on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Ishares Municipal Bond or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Eaton Vance Msschsts
Performance |
| Timeline |
| Ishares Municipal Bond |
| Eaton Vance Msschsts |
Ishares Municipal and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Eaton Vance
The main advantage of trading using opposite Ishares Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal 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.| Ishares Municipal vs. Calvert Moderate Allocation | Ishares Municipal vs. Fidelity Managed Retirement | Ishares Municipal vs. Deutsche Multi Asset Moderate | Ishares Municipal vs. Blackrock Moderate Prepared |
| Eaton Vance vs. Ftfa Franklin Templeton Growth | Eaton Vance vs. Smallcap Growth Fund | Eaton Vance vs. Needham Aggressive Growth | Eaton Vance vs. Qs Defensive Growth |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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