Correlation Between Eaton Vance and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Nuveen New 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 New 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 New Jersey, you can compare the effects of market volatilities on Eaton Vance and Nuveen New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Nuveen New.
Diversification Opportunities for Eaton Vance and Nuveen New
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Nuveen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen New go up and down completely randomly.
Pair Corralation between Eaton Vance and Nuveen New
Considering the 90-day investment horizon Eaton Vance National is expected to under-perform the Nuveen New. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance National is 1.07 times less risky than Nuveen New. The stock trades about -0.03 of its potential returns per unit of risk. The Nuveen New Jersey is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,231 in Nuveen New Jersey on September 1, 2024 and sell it today you would earn a total of 31.00 from holding Nuveen New Jersey or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance National vs. Nuveen New Jersey
Performance |
| Timeline |
| Eaton Vance National |
| Nuveen New Jersey |
Eaton Vance and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Nuveen New
The main advantage of trading using opposite Eaton Vance and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.| Eaton Vance vs. Visa Class A | Eaton Vance vs. Diamond Hill Investment | Eaton Vance vs. Distoken Acquisition | Eaton Vance vs. Associated Capital Group |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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