Correlation Between Eaton Vance and New America
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and New America 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 New America 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 New America High, you can compare the effects of market volatilities on Eaton Vance and New America 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 New America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and New America.
Diversification Opportunities for Eaton Vance and New America
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eaton and New is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and New America High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New America High 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 New America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New America High has no effect on the direction of Eaton Vance i.e., Eaton Vance and New America go up and down completely randomly.
Pair Corralation between Eaton Vance and New America
Considering the 90-day investment horizon Eaton Vance Tax is expected to under-perform the New America. In addition to that, Eaton Vance is 1.74 times more volatile than New America High. It trades about -0.1 of its total potential returns per unit of risk. New America High is currently generating about 0.12 per unit of volatility. If you would invest 818.00 in New America High on September 20, 2024 and sell it today you would earn a total of 7.00 from holding New America High or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Tax vs. New America High
Performance |
| Timeline |
| Eaton Vance Tax |
| New America High |
Eaton Vance and New America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and New America
The main advantage of trading using opposite Eaton Vance and New America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, New America 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 New America will offset losses from the drop in New America's long position.| Eaton Vance vs. Eaton Vance Risk | Eaton Vance vs. Blackrock Muniholdings Closed | Eaton Vance vs. DTF Tax Free | Eaton Vance vs. Eaton Vance Floating |
| New America vs. Pioneer Municipal High | New America vs. DWS Municipal Income | New America vs. RiverNorth Specialty Finance | New America vs. Putnam Managed Municipal |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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