Correlation Between Eaton Vance and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Ishares 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 Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Richard and Ishares Municipal Bond, you can compare the effects of market volatilities on Eaton Vance and Ishares 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 Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Ishares Municipal.
Diversification Opportunities for Eaton Vance and Ishares Municipal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eaton and Ishares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Richard and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond 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 Richard are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Eaton Vance i.e., Eaton Vance and Ishares Municipal go up and down completely randomly.
Pair Corralation between Eaton Vance and Ishares Municipal
Assuming the 90 days horizon Eaton Vance Richard is expected to under-perform the Ishares Municipal. In addition to that, Eaton Vance is 1.88 times more volatile than Ishares Municipal Bond. It trades about -0.04 of its total potential returns per unit of risk. Ishares Municipal Bond is currently generating about -0.05 per unit of volatility. If you would invest 1,115 in Ishares Municipal Bond on December 3, 2024 and sell it today you would lose (8.00) from holding Ishares Municipal Bond or give up 0.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
Eaton Vance Richard vs. Ishares Municipal Bond
Performance |
Timeline |
Eaton Vance Richard |
Ishares Municipal Bond |
Eaton Vance and Ishares Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eaton Vance and Ishares Municipal
The main advantage of trading using opposite Eaton Vance and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Ishares 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.Eaton Vance vs. Nuveen Global Real | Eaton Vance vs. Doubleline Global Bond | Eaton Vance vs. T Rowe Price | Eaton Vance vs. Ab Global Real |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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