Correlation Between Eaton Vance and Nuveen Pennsylvania

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

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

Diversification Opportunities for Eaton Vance and Nuveen Pennsylvania

0.39

Correlation Coefficient

Eaton Vance  Nuveen Pennsylvania

Weak diversification

The 3 months correlation between Eaton and Nuveen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Mbf and Nuveen Pennsylvania Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Pennsylvania 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 Mbf are associated (or correlated) with Nuveen Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Pennsylvania has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen Pennsylvania go up and down completely randomly.

Pair Corralation between Eaton Vance and Nuveen Pennsylvania

Considering the 90-day investment horizon Eaton Vance Mbf is expected to under-perform the Nuveen Pennsylvania. But the fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Mbf is 1.31 times less risky than Nuveen Pennsylvania. The fund trades about -0.07 of its potential returns per unit of risk. The Nuveen Pennsylvania Quality is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,108  in Nuveen Pennsylvania Quality on December 19, 2024 and sell it today you would earn a total of  26.00  from holding Nuveen Pennsylvania Quality or generate 2.35% return on investment over 90 days.

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

Eaton Vance Mbf  vs.  Nuveen Pennsylvania Quality

Eaton Vance Mbf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Mbf has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy forward indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Nuveen Pennsylvania

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Pennsylvania Quality are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Nuveen Pennsylvania is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eaton Vance and Nuveen Pennsylvania

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

The idea behind Eaton Vance Mbf and Nuveen Pennsylvania Quality 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.