Correlation Between Eaton Vance and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Intermediate Government 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 Eaton Vance and Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Municipal and Intermediate Government Bond, you can compare the effects of market volatilities on Eaton Vance and Intermediate Government 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 Eaton Vance with a short position of Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Intermediate Government.
Diversification Opportunities for Eaton Vance and Intermediate Government
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Intermediate is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Eaton Vance 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 Eaton Vance Municipal are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Eaton Vance i.e., Eaton Vance and Intermediate Government go up and down completely randomly.
Pair Corralation between Eaton Vance and Intermediate Government
Assuming the 90 days horizon Eaton Vance Municipal is expected to generate 2.03 times more return on investment than Intermediate Government. However, Eaton Vance is 2.03 times more volatile than Intermediate Government Bond. It trades about 0.13 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.17 per unit of risk. If you would invest 1,061 in Eaton Vance Municipal on September 14, 2024 and sell it today you would earn a total of 84.00 from holding Eaton Vance Municipal or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Intermediate Government Bond
Performance |
| Timeline |
| Eaton Vance Municipal |
| Intermediate Government |
Eaton Vance and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Intermediate Government
The main advantage of trading using opposite Eaton Vance and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.| Eaton Vance vs. Intermediate Government Bond | Eaton Vance vs. Dreyfus Government Cash | Eaton Vance vs. Elfun Government Money | Eaton Vance vs. Hsbc Government Money |
| Intermediate Government vs. Applied Finance Explorer | Intermediate Government vs. Palm Valley Capital | Intermediate Government vs. Fpa Queens Road | Intermediate Government vs. Ab Small Cap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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