Correlation Between Eaton Vance and Pioneer Municipal

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

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

Diversification Opportunities for Eaton Vance and Pioneer Municipal

0.42

Correlation Coefficient

Eaton Vance  Pioneer Municipal

Very weak diversification

The 3 months correlation between Eaton and Pioneer is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and Pioneer Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Municipal High and Eaton Vance 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 Eaton Vance Senior are associated (or correlated) with Pioneer Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Municipal High has no effect on the direction of Eaton Vance i.e., Eaton Vance and Pioneer Municipal go up and down completely randomly.

Pair Corralation between Eaton Vance and Pioneer Municipal

Considering the 90-day investment horizon Eaton Vance Senior is expected to under-perform the Pioneer Municipal. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance Senior is 1.28 times less risky than Pioneer Municipal. The stock trades about -0.13 of its potential returns per unit of risk. The Pioneer Municipal High is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  838.00  in Pioneer Municipal High on December 28, 2024 and sell it today you would lose (4.00) from holding Pioneer Municipal High or give up 0.48% of portfolio value over 90 days.

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

Eaton Vance Senior  vs.  Pioneer Municipal High

Eaton Vance Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pioneer Municipal High

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Municipal High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Pioneer Municipal 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 Eaton Vance and Pioneer Municipal

The main advantage of trading using opposite Eaton Vance and Pioneer Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Pioneer Municipal 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 Pioneer Municipal will offset losses from the drop in Pioneer Municipal's long position.

The idea behind Eaton Vance Senior and Pioneer Municipal High 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..