Correlation Between Eaton Vance and Nuveen Dynamic
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Nuveen Dynamic 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 Nuveen Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance National and Nuveen Dynamic Municipal, you can compare the effects of market volatilities on Eaton Vance and Nuveen Dynamic 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 Nuveen Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Nuveen Dynamic.
Diversification Opportunities for Eaton Vance and Nuveen Dynamic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Nuveen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Nuveen Dynamic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dynamic Municipal 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 National are associated (or correlated) with Nuveen Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dynamic Municipal has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen Dynamic go up and down completely randomly.
Pair Corralation between Eaton Vance and Nuveen Dynamic
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Nuveen Dynamic. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 1.17 times less risky than Nuveen Dynamic. The stock trades about -0.17 of its potential returns per unit of risk. The Nuveen Dynamic Municipal is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,070 in Nuveen Dynamic Municipal on August 29, 2024 and sell it today you would lose (12.00) from holding Nuveen Dynamic Municipal or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. Nuveen Dynamic Municipal
Performance |
| Timeline |
| Eaton Vance National |
| Nuveen Dynamic Municipal |
Eaton Vance and Nuveen Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Nuveen Dynamic
The main advantage of trading using opposite Eaton Vance and Nuveen Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Nuveen Dynamic 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 Nuveen Dynamic will offset losses from the drop in Nuveen Dynamic's long position.| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
| Nuveen Dynamic vs. Blackrock Muni Intermediate | Nuveen Dynamic vs. Blackrock Muniyield Quality | Nuveen Dynamic vs. DWS Municipal Income | Nuveen Dynamic vs. Blackrock Muniyield Quality |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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