Correlation Between Eaton Vance and Nuveen Floating

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

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

Diversification Opportunities for Eaton Vance and Nuveen Floating

0.91

Correlation Coefficient

Eaton Vance  Nuveen Floating

Almost no diversification

The 3 months correlation between Eaton and Nuveen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Floating and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate 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 Floating are associated (or correlated) with Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen Floating go up and down completely randomly.

Pair Corralation between Eaton Vance and Nuveen Floating

Considering the 90-day investment horizon Eaton Vance Floating is expected to generate 0.6 times more return on investment than Nuveen Floating. However, Eaton Vance Floating is 1.67 times less risky than Nuveen Floating. It trades about 0.14 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.05 per unit of risk. If you would invest  1,325  in Eaton Vance Floating on September 26, 2024 and sell it today you would earn a total of  17.00  from holding Eaton Vance Floating or generate 1.28% return on investment over 90 days.

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

Eaton Vance Floating  vs.  Nuveen Floating Rate

Eaton Vance Floating

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Floating are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuveen Floating Rate

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Floating Rate are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Nuveen Floating may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eaton Vance and Nuveen Floating

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

The idea behind Eaton Vance Floating and Nuveen Floating Rate 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.