Correlation Between Eaton Vance and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and MFS Municipal 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 MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Tax and MFS Municipal Income, you can compare the effects of market volatilities on Eaton Vance and MFS Municipal 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 MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and MFS Municipal.
Diversification Opportunities for Eaton Vance and MFS Municipal
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eaton and MFS is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income 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 Tax are associated (or correlated) with MFS Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Municipal Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and MFS Municipal go up and down completely randomly.
Pair Corralation between Eaton Vance and MFS Municipal
Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.82 times more return on investment than MFS Municipal. However, Eaton Vance Tax is 1.21 times less risky than MFS Municipal. It trades about 0.27 of its potential returns per unit of risk. MFS Municipal Income is currently generating about -0.09 per unit of risk. If you would invest 1,401 in Eaton Vance Tax on August 26, 2024 and sell it today you would earn a total of 84.00 from holding Eaton Vance Tax or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Tax vs. MFS Municipal Income
Performance |
| Timeline |
| Eaton Vance Tax |
| MFS Municipal Income |
Eaton Vance and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and MFS Municipal
The main advantage of trading using opposite Eaton Vance and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, MFS Municipal 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 MFS Municipal will offset losses from the drop in MFS Municipal's long position.| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax Managed | Eaton Vance vs. Eaton Vance Risk | Eaton Vance vs. Eaton Vance Tax |
| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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