Correlation Between Eaton Vance and Pimco California
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Pimco California 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 California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Municipal and Pimco California Municipal, you can compare the effects of market volatilities on Eaton Vance and Pimco California 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 California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Pimco California.
Diversification Opportunities for Eaton Vance and Pimco California
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eaton and Pimco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Pimco California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco California Mun 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 Municipal are associated (or correlated) with Pimco California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco California Mun has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pimco California go up and down completely randomly.
Pair Corralation between Eaton Vance and Pimco California
Considering the 90-day investment horizon Eaton Vance Municipal is expected to generate 0.74 times more return on investment than Pimco California. However, Eaton Vance Municipal is 1.34 times less risky than Pimco California. It trades about 0.05 of its potential returns per unit of risk. Pimco California Municipal is currently generating about -0.01 per unit of risk. If you would invest 910.00 in Eaton Vance Municipal on September 2, 2024 and sell it today you would earn a total of 169.00 from holding Eaton Vance Municipal or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Pimco California Municipal
Performance |
| Timeline |
| Eaton Vance Municipal |
| Pimco California Mun |
Eaton Vance and Pimco California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Pimco California
The main advantage of trading using opposite Eaton Vance and Pimco California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pimco California 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 California will offset losses from the drop in Pimco California's long position.| Eaton Vance vs. Munivest Fund | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniholdings Closed |
| Pimco California vs. Pimco California Municipal | Pimco California vs. Nuveen California Amt | Pimco California vs. Eaton Vance California | Pimco California vs. Invesco California Value |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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