Correlation Between Eaton Vance and Flaherty Crumrine
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Flaherty Crumrine 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 Flaherty Crumrine 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 Flaherty Crumrine Preferredome, you can compare the effects of market volatilities on Eaton Vance and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Flaherty Crumrine.
Diversification Opportunities for Eaton Vance and Flaherty Crumrine
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Flaherty is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Flaherty Crumrine Preferredome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Eaton Vance i.e., Eaton Vance and Flaherty Crumrine go up and down completely randomly.
Pair Corralation between Eaton Vance and Flaherty Crumrine
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.37 times less return on investment than Flaherty Crumrine. But when comparing it to its historical volatility, Eaton Vance Municipal is 1.1 times less risky than Flaherty Crumrine. It trades about 0.11 of its potential returns per unit of risk. Flaherty Crumrine Preferredome is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Flaherty Crumrine Preferredome on September 2, 2024 and sell it today you would earn a total of 224.00 from holding Flaherty Crumrine Preferredome or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Municipal vs. Flaherty Crumrine Preferredome
Performance |
| Timeline |
| Eaton Vance Municipal |
| Flaherty Crumrine |
Eaton Vance and Flaherty Crumrine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Flaherty Crumrine
The main advantage of trading using opposite Eaton Vance and Flaherty Crumrine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Flaherty Crumrine 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 Flaherty Crumrine will offset losses from the drop in Flaherty Crumrine'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 |
| Flaherty Crumrine vs. Flaherty Crumrine Preferred | Flaherty Crumrine vs. Flaherty Crumrine Preferred | Flaherty Crumrine vs. Flaherty Crumrine Total | Flaherty Crumrine vs. Putnam Master Intermediate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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