Correlation Between Eaton Vance and Nuveen NASDAQ
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Nuveen NASDAQ 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 NASDAQ 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 Nuveen NASDAQ 100, you can compare the effects of market volatilities on Eaton Vance and Nuveen NASDAQ 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 NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Nuveen NASDAQ.
Diversification Opportunities for Eaton Vance and Nuveen NASDAQ
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Nuveen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Nuveen NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen NASDAQ 100 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 Nuveen NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen NASDAQ 100 has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen NASDAQ go up and down completely randomly.
Pair Corralation between Eaton Vance and Nuveen NASDAQ
Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 0.83 times more return on investment than Nuveen NASDAQ. However, Eaton Vance Tax is 1.21 times less risky than Nuveen NASDAQ. It trades about 0.07 of its potential returns per unit of risk. Nuveen NASDAQ 100 is currently generating about 0.04 per unit of risk. If you would invest 715.00 in Eaton Vance Tax on September 1, 2024 and sell it today you would earn a total of 142.00 from holding Eaton Vance Tax or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Tax vs. Nuveen NASDAQ 100
Performance |
| Timeline |
| Eaton Vance Tax |
| Nuveen NASDAQ 100 |
Eaton Vance and Nuveen NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Nuveen NASDAQ
The main advantage of trading using opposite Eaton Vance and Nuveen NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Nuveen NASDAQ 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 NASDAQ will offset losses from the drop in Nuveen NASDAQ'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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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