Correlation Between Baird Strategic and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Baird Strategic 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 Baird Strategic and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Strategic Municipal and Eaton Vance Short, you can compare the effects of market volatilities on Baird Strategic 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 Baird Strategic with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Eaton Vance.
Diversification Opportunities for Baird Strategic and Eaton Vance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Eaton is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short and Baird Strategic 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 Baird Strategic Municipal 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 Short has no effect on the direction of Baird Strategic i.e., Baird Strategic and Eaton Vance go up and down completely randomly.
Pair Corralation between Baird Strategic and Eaton Vance
Assuming the 90 days horizon Baird Strategic is expected to generate 1.31 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Baird Strategic Municipal is 1.64 times less risky than Eaton Vance. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Short is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Eaton Vance Short on September 12, 2024 and sell it today you would earn a total of 54.00 from holding Eaton Vance Short or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. Eaton Vance Short
Performance |
| Timeline |
| Baird Strategic Municipal |
| Eaton Vance Short |
Baird Strategic and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Eaton Vance
The main advantage of trading using opposite Baird Strategic and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic 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.| Baird Strategic vs. Tax Exempt Bond | Baird Strategic vs. Blackrock National Municipal | Baird Strategic vs. SCOR PK | Baird Strategic vs. Morningstar Unconstrained Allocation |
| Eaton Vance vs. Pace Municipal Fixed | Eaton Vance vs. Baird Strategic Municipal | Eaton Vance vs. Oklahoma Municipal Fund | Eaton Vance vs. Morningstar Municipal Bond |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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