Correlation Between Tax-exempt Fund and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Tax-exempt Fund and Eaton Vance 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 Tax-exempt Fund and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Exempt Fund Of and Eaton Vance Municipal, you can compare the effects of market volatilities on Tax-exempt Fund and Eaton Vance 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 Tax-exempt Fund with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-exempt Fund and Eaton Vance.
Diversification Opportunities for Tax-exempt Fund and Eaton Vance
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Tax-exempt and Eaton is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Tax Exempt Fund Of and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and Tax-exempt Fund 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 Tax Exempt Fund Of are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Tax-exempt Fund i.e., Tax-exempt Fund and Eaton Vance go up and down completely randomly.
Pair Corralation between Tax-exempt Fund and Eaton Vance
Assuming the 90 days horizon Tax Exempt Fund Of is expected to generate 0.99 times more return on investment than Eaton Vance. However, Tax Exempt Fund Of is 1.01 times less risky than Eaton Vance. It trades about 0.25 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.23 per unit of risk. If you would invest 1,665 in Tax Exempt Fund Of on December 1, 2024 and sell it today you would earn a total of 19.00 from holding Tax Exempt Fund Of or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Exempt Fund Of vs. Eaton Vance Municipal
Performance |
| Timeline |
| Tax Exempt Fund |
| Eaton Vance Municipal |
Tax-exempt Fund and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-exempt Fund and Eaton Vance
The main advantage of trading using opposite Tax-exempt Fund and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-exempt Fund position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Tax-exempt Fund vs. Prudential Emerging Markets | Tax-exempt Fund vs. First American Funds | Tax-exempt Fund vs. Franklin Government Money | Tax-exempt Fund vs. Collegeadvantage 529 Savings |
| Eaton Vance vs. Barings Active Short | Eaton Vance vs. Massmutual Premier E | Eaton Vance vs. Doubleline Emerging Markets | Eaton Vance vs. Artisan High Income |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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