Correlation Between Eaton Vance and Source Capital
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Source Capital 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 Source Capital 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 Source Capital Closed, you can compare the effects of market volatilities on Eaton Vance and Source Capital 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 Source Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Source Capital.
Diversification Opportunities for Eaton Vance and Source Capital
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and Source is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Source Capital Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source Capital Closed 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 Source Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source Capital Closed has no effect on the direction of Eaton Vance i.e., Eaton Vance and Source Capital go up and down completely randomly.
Pair Corralation between Eaton Vance and Source Capital
Considering the 90-day investment horizon Eaton Vance National is expected to generate 1.08 times more return on investment than Source Capital. However, Eaton Vance is 1.08 times more volatile than Source Capital Closed. It trades about 0.12 of its potential returns per unit of risk. Source Capital Closed is currently generating about 0.12 per unit of risk. If you would invest 1,677 in Eaton Vance National on November 23, 2024 and sell it today you would earn a total of 28.00 from holding Eaton Vance National or generate 1.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eaton Vance National vs. Source Capital Closed
Performance |
Timeline |
Eaton Vance National |
Source Capital Closed |
Eaton Vance and Source Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eaton Vance and Source Capital
The main advantage of trading using opposite Eaton Vance and Source Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Source Capital 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 Source Capital will offset losses from the drop in Source Capital's long position.Eaton Vance vs. Blackrock Muniholdings Ny | ||
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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