Correlation Between The National and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both The National 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 The National 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 Georgia, you can compare the effects of market volatilities on The National 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 The National with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of The National and Eaton Vance.
Diversification Opportunities for The National and Eaton Vance
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Eaton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and Eaton Vance Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Georgia and The National 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 Georgia has no effect on the direction of The National i.e., The National and Eaton Vance go up and down completely randomly.
Pair Corralation between The National and Eaton Vance
Assuming the 90 days horizon The National Tax Free is expected to under-perform the Eaton Vance. But the mutual fund apears to be less risky and, when comparing its historical volatility, The National Tax Free is 1.19 times less risky than Eaton Vance. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Eaton Vance Georgia is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 820.00 in Eaton Vance Georgia on September 3, 2024 and sell it today you would lose (3.00) from holding Eaton Vance Georgia or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The National Tax Free vs. Eaton Vance Georgia
Performance |
| Timeline |
| National Tax |
| Eaton Vance Georgia |
The National and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The National and Eaton Vance
The main advantage of trading using opposite The National and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National 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 National vs. The Missouri Tax Free | The National vs. The Bond Fund | The National vs. High Yield Municipal Fund | The National vs. Fidelity Intermediate Municipal |
| Eaton Vance vs. The National Tax Free | Eaton Vance vs. The Missouri Tax Free | Eaton Vance vs. Aquagold International | Eaton Vance vs. Morningstar Unconstrained Allocation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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