Correlation Between Pace Municipal and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Eaton Vance Short, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Eaton Vance.
Diversification Opportunities for Pace Municipal and Eaton Vance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Eaton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short and Pace Municipal 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 Pace Municipal Fixed 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 Short has no effect on the direction of Pace Municipal i.e., Pace Municipal and Eaton Vance go up and down completely randomly.
Pair Corralation between Pace Municipal and Eaton Vance
Assuming the 90 days horizon Pace Municipal is expected to generate 1.86 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Pace Municipal Fixed is 1.42 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Short is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Eaton Vance Short on September 12, 2024 and sell it today you would earn a total of 54.00 from holding Eaton Vance Short or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Eaton Vance Short
Performance |
| Timeline |
| Pace Municipal Fixed |
| Eaton Vance Short |
Pace Municipal and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Eaton Vance
The main advantage of trading using opposite Pace Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Scharf Global Opportunity | Pace Municipal vs. Ab Value Fund | Pace Municipal vs. Arrow Managed Futures | Pace Municipal vs. Materials Portfolio Fidelity |
| Eaton Vance vs. Pace Municipal Fixed | Eaton Vance vs. Baird Strategic Municipal | Eaton Vance vs. Oklahoma Municipal Fund | Eaton Vance vs. Morningstar Municipal Bond |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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