Correlation Between National Tax and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both National Tax 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 National Tax and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The National Tax Free and Eaton Vance Municipal, you can compare the effects of market volatilities on National Tax 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 National Tax with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Tax and Eaton Vance.
Diversification Opportunities for National Tax and Eaton Vance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Eaton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and National Tax 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 The National Tax Free 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 Municipal has no effect on the direction of National Tax i.e., National Tax and Eaton Vance go up and down completely randomly.
Pair Corralation between National Tax and Eaton Vance
Assuming the 90 days horizon National Tax is expected to generate 1.06 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, The National Tax Free is 1.27 times less risky than Eaton Vance. It trades about 0.55 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Eaton Vance Municipal on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Eaton Vance Municipal or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The National Tax Free vs. Eaton Vance Municipal
Performance |
| Timeline |
| National Tax |
| Eaton Vance Municipal |
National Tax and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Tax and Eaton Vance
The main advantage of trading using opposite National Tax and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Tax 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.| National Tax vs. The Missouri Tax Free | National Tax vs. The Bond Fund | National Tax vs. High Yield Municipal Fund | National Tax vs. Fidelity Intermediate Municipal |
| Eaton Vance vs. Aqr Small Cap | Eaton Vance vs. Glg Intl Small | Eaton Vance vs. Ab Small Cap | Eaton Vance vs. Old Westbury Small |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |