Correlation Between Invesco Municipal and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Invesco 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 Invesco 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 Invesco Municipal Trust and Eaton Vance Mbf, you can compare the effects of market volatilities on Invesco 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 Invesco Municipal with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Eaton Vance.
Diversification Opportunities for Invesco Municipal and Eaton Vance
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Eaton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Trust and Eaton Vance Mbf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Mbf and Invesco 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 Invesco Municipal Trust 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 Mbf has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Eaton Vance go up and down completely randomly.
Pair Corralation between Invesco Municipal and Eaton Vance
Considering the 90-day investment horizon Invesco Municipal is expected to generate 1.34 times less return on investment than Eaton Vance. In addition to that, Invesco Municipal is 1.1 times more volatile than Eaton Vance Mbf. It trades about 0.14 of its total potential returns per unit of risk. Eaton Vance Mbf is currently generating about 0.21 per unit of volatility. If you would invest 1,038 in Eaton Vance Mbf on August 31, 2024 and sell it today you would earn a total of 31.00 from holding Eaton Vance Mbf or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Trust vs. Eaton Vance Mbf
Performance |
| Timeline |
| Invesco Municipal Trust |
| Eaton Vance Mbf |
Invesco Municipal and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Eaton Vance
The main advantage of trading using opposite Invesco Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco 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.| Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High Income |
| Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance California | Eaton Vance vs. Eaton Vance New | Eaton Vance vs. BlackRock Municipal Income |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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