Correlation Between Nuveen SP and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Nuveen SP 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 SP 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 SP 500 and Eaton Vance Tax, you can compare the effects of market volatilities on Nuveen SP 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 SP with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen SP and Eaton Vance.

Diversification Opportunities for Nuveen SP and Eaton Vance

0.92

Correlation Coefficient

Nuveen SP  Eaton Vance

Almost no diversification

The 3 months correlation between Nuveen and Eaton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen SP 500 and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Nuveen SP 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 SP 500 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 Tax has no effect on the direction of Nuveen SP i.e., Nuveen SP and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen SP and Eaton Vance

Given the investment horizon of 90 days Nuveen SP 500 is expected to generate 0.94 times more return on investment than Eaton Vance. However, Nuveen SP 500 is 1.06 times less risky than Eaton Vance. It trades about -0.06 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about -0.1 per unit of risk. If you would invest  1,367  in Nuveen SP 500 on December 27, 2024 and sell it today you would lose (47.00) from holding Nuveen SP 500 or give up 3.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Nuveen SP 500  vs.  Eaton Vance Tax

Nuveen SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Nuveen SP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Tax has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nuveen SP and Eaton Vance

The main advantage of trading using opposite Nuveen SP and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen SP 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 SP 500 and Eaton Vance Tax 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..