Correlation Between Eaton Vance and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Nuveen 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 Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Senior and Nuveen Municipal Credit, you can compare the effects of market volatilities on Eaton Vance and Nuveen 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 Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Nuveen Municipal.
Diversification Opportunities for Eaton Vance and Nuveen Municipal
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eaton and Nuveen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Nuveen Municipal Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal Credit 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 Senior are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal Credit has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Eaton Vance and Nuveen Municipal
Considering the 90-day investment horizon Eaton Vance Senior is expected to generate 1.35 times more return on investment than Nuveen Municipal. However, Eaton Vance is 1.35 times more volatile than Nuveen Municipal Credit. It trades about 0.07 of its potential returns per unit of risk. Nuveen Municipal Credit is currently generating about 0.02 per unit of risk. If you would invest 433.00 in Eaton Vance Senior on August 31, 2024 and sell it today you would earn a total of 196.00 from holding Eaton Vance Senior or generate 45.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Eaton Vance Senior vs. Nuveen Municipal Credit
Performance |
| Timeline |
| Eaton Vance Senior |
| Nuveen Municipal Credit |
Eaton Vance and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Nuveen Municipal
The main advantage of trading using opposite Eaton Vance and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Nuveen 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 Nuveen Municipal will offset losses from the drop in Nuveen Municipal's long position.| Eaton Vance vs. HUMANA INC | Eaton Vance vs. SCOR PK | Eaton Vance vs. Aquagold International | Eaton Vance vs. Thrivent High Yield |
| Nuveen Municipal vs. Munivest Fund | Nuveen Municipal vs. Blackrock Muniholdings Quality | Nuveen Municipal vs. DWS Municipal Income | Nuveen Municipal vs. Blackrock Muniholdings Closed |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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