Correlation Between Main Street and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Main Street 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 Main Street and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Eaton Vance Municipal, you can compare the effects of market volatilities on Main Street 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 Main Street with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Eaton Vance.
Diversification Opportunities for Main Street and Eaton Vance
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Main and Eaton is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital 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 Main Street 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 Main Street Capital 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 Main Street i.e., Main Street and Eaton Vance go up and down completely randomly.
Pair Corralation between Main Street and Eaton Vance
Given the investment horizon of 90 days Main Street Capital is expected to generate 1.25 times more return on investment than Eaton Vance. However, Main Street is 1.25 times more volatile than Eaton Vance Municipal. It trades about 0.15 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.07 per unit of risk. If you would invest 3,509 in Main Street Capital on September 2, 2024 and sell it today you would earn a total of 2,038 from holding Main Street Capital or generate 58.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Capital vs. Eaton Vance Municipal
Performance |
| Timeline |
| Main Street Capital |
| Eaton Vance Municipal |
Main Street and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Eaton Vance
The main advantage of trading using opposite Main Street and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street 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.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Eaton Vance vs. Munivest Fund | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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