Correlation Between Nuveen Municipalome and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Nuveen Municipalome 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 Nuveen Municipalome and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuveen Municipalome and Eaton Vance New, you can compare the effects of market volatilities on Nuveen Municipalome 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 Nuveen Municipalome with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipalome and Eaton Vance.

Diversification Opportunities for Nuveen Municipalome and Eaton Vance

0.55

Correlation Coefficient

Nuveen Municipalome  Eaton Vance

Very weak diversification

The 3 months correlation between Nuveen and Eaton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipalome and Eaton Vance New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance New and Nuveen Municipalome 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 Nuveen Municipalome 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 New has no effect on the direction of Nuveen Municipalome i.e., Nuveen Municipalome and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen Municipalome and Eaton Vance

Considering the 90-day investment horizon Nuveen Municipalome is expected to under-perform the Eaton Vance. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Municipalome is 1.48 times less risky than Eaton Vance. The fund trades about -0.15 of its potential returns per unit of risk. The Eaton Vance New is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  978.00  in Eaton Vance New on September 3, 2024 and sell it today you would earn a total of  11.00  from holding Eaton Vance New or generate 1.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Municipalome  vs.  Eaton Vance New

Nuveen Municipalome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Municipalome has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong primary indicators, Nuveen Municipalome is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Eaton Vance New

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance New are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Municipalome and Eaton Vance

The main advantage of trading using opposite Nuveen Municipalome and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipalome 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 Nuveen Municipalome and Eaton Vance New 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.