Correlation Between Pimco Municipal and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Pimco 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 Pimco 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 Pimco Municipal Income and Eaton Vance California, you can compare the effects of market volatilities on Pimco 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 Pimco Municipal with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Municipal and Eaton Vance.
Diversification Opportunities for Pimco Municipal and Eaton Vance
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Eaton is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Municipal Income and Eaton Vance California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance California and Pimco 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 Pimco Municipal Income 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 California has no effect on the direction of Pimco Municipal i.e., Pimco Municipal and Eaton Vance go up and down completely randomly.
Pair Corralation between Pimco Municipal and Eaton Vance
Considering the 90-day investment horizon Pimco Municipal is expected to generate 1.66 times less return on investment than Eaton Vance. In addition to that, Pimco Municipal is 1.46 times more volatile than Eaton Vance California. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance California is currently generating about 0.06 per unit of volatility. If you would invest 829.00 in Eaton Vance California on August 31, 2024 and sell it today you would earn a total of 117.00 from holding Eaton Vance California or generate 14.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Municipal Income vs. Eaton Vance California
Performance |
| Timeline |
| Pimco Municipal Income |
| Eaton Vance California |
Pimco Municipal and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Municipal and Eaton Vance
The main advantage of trading using opposite Pimco Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco 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.| Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco California Municipal | Pimco Municipal vs. Pimco New York |
| Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Nuveen California Amt | Eaton Vance vs. Invesco California Value |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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