Correlation Between Federated Pennsylvania and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania 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 Pennsylvania 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 Pennsylvania Municipal and Eaton Vance Tabs, you can compare the effects of market volatilities on Federated Pennsylvania 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 Pennsylvania with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Eaton Vance.
Diversification Opportunities for Federated Pennsylvania and Eaton Vance
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and Eaton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Eaton Vance Tabs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tabs and Federated Pennsylvania 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 Pennsylvania 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 Tabs has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Eaton Vance go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Eaton Vance
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 1.32 times more return on investment than Eaton Vance. However, Federated Pennsylvania is 1.32 times more volatile than Eaton Vance Tabs. It trades about 0.17 of its potential returns per unit of risk. Eaton Vance Tabs is currently generating about 0.17 per unit of risk. If you would invest 1,004 in Federated Pennsylvania Municipal on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Federated Pennsylvania Municipal or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Eaton Vance Tabs
Performance |
| Timeline |
| Federated Pennsylvania |
| Eaton Vance Tabs |
Federated Pennsylvania and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Eaton Vance
The main advantage of trading using opposite Federated Pennsylvania and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania 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.The idea behind Federated Pennsylvania Municipal and Eaton Vance Tabs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Eaton Vance vs. T Rowe Price | Eaton Vance vs. Alliancebernstein National Municipal | Eaton Vance vs. Limited Term Tax | Eaton Vance vs. Federated Pennsylvania Municipal |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |