Correlation Between Federated Ohio and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Federated Ohio 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 Federated Ohio and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Eaton Vance Income, you can compare the effects of market volatilities on Federated Ohio 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 Federated Ohio with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Eaton Vance.
Diversification Opportunities for Federated Ohio and Eaton Vance
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Eaton is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Eaton Vance Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Income and Federated Ohio 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 Federated Ohio Municipal 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 Income has no effect on the direction of Federated Ohio i.e., Federated Ohio and Eaton Vance go up and down completely randomly.
Pair Corralation between Federated Ohio and Eaton Vance
Assuming the 90 days horizon Federated Ohio Municipal is expected to generate 2.05 times more return on investment than Eaton Vance. However, Federated Ohio is 2.05 times more volatile than Eaton Vance Income. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Income is currently generating about 0.13 per unit of risk. If you would invest 1,042 in Federated Ohio Municipal on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Federated Ohio Municipal or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Eaton Vance Income
Performance |
| Timeline |
| Federated Ohio Municipal |
| Eaton Vance Income |
Federated Ohio and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Eaton Vance
The main advantage of trading using opposite Federated Ohio and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio 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.| Federated Ohio vs. Gmo Resources | Federated Ohio vs. Fidelity Advisor Energy | Federated Ohio vs. Calvert Global Energy | Federated Ohio vs. Energy Basic Materials |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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