Correlation Between Eaton Vance and Pimco Municipal
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Pimco 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 Pimco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance California and Pimco Municipal Income, you can compare the effects of market volatilities on Eaton Vance and Pimco 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 Pimco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Pimco Municipal.
Diversification Opportunities for Eaton Vance and Pimco Municipal
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and Pimco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance California and Pimco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco 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 California are associated (or correlated) with Pimco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Municipal Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pimco Municipal go up and down completely randomly.
Pair Corralation between Eaton Vance and Pimco Municipal
Considering the 90-day investment horizon Eaton Vance is expected to generate 2.1 times less return on investment than Pimco Municipal. But when comparing it to its historical volatility, Eaton Vance California is 1.38 times less risky than Pimco Municipal. It trades about 0.04 of its potential returns per unit of risk. Pimco Municipal Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 709.00 in Pimco Municipal Income on August 28, 2024 and sell it today you would earn a total of 72.00 from holding Pimco Municipal Income or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Eaton Vance California vs. Pimco Municipal Income
Performance |
| Timeline |
| Eaton Vance California |
| Pimco Municipal Income |
Eaton Vance and Pimco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Pimco Municipal
The main advantage of trading using opposite Eaton Vance and Pimco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pimco 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 Pimco Municipal will offset losses from the drop in Pimco Municipal's long position.| Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Nuveen California Amt | Eaton Vance vs. Invesco California Value |
| Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco California Municipal | Pimco Municipal vs. Pimco New York |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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