Correlation Between Madison Covered and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Madison Covered 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 Madison Covered and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Covered Call and Eaton Vance National, you can compare the effects of market volatilities on Madison Covered 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 Madison Covered with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Covered and Eaton Vance.
Diversification Opportunities for Madison Covered and Eaton Vance
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Madison and Eaton is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Madison Covered Call and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and Madison Covered 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 Madison Covered Call 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 National has no effect on the direction of Madison Covered i.e., Madison Covered and Eaton Vance go up and down completely randomly.
Pair Corralation between Madison Covered and Eaton Vance
Considering the 90-day investment horizon Madison Covered is expected to generate 4.38 times less return on investment than Eaton Vance. In addition to that, Madison Covered is 1.4 times more volatile than Eaton Vance National. It trades about 0.0 of its total potential returns per unit of risk. Eaton Vance National is currently generating about 0.02 per unit of volatility. If you would invest 1,737 in Eaton Vance National on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Eaton Vance National or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Covered Call vs. Eaton Vance National
Performance |
| Timeline |
| Madison Covered Call |
| Eaton Vance National |
Madison Covered and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Covered and Eaton Vance
The main advantage of trading using opposite Madison Covered and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Covered 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.| Madison Covered vs. Invesco High Income | Madison Covered vs. MFS Investment Grade | Madison Covered vs. Eaton Vance National | Madison Covered vs. New America High |
| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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