Correlation Between Eaton Vance and Nuveen Preferred

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

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

Diversification Opportunities for Eaton Vance and Nuveen Preferred

0.27

Correlation Coefficient

Eaton Vance  Nuveen Preferred

Modest diversification

The 3 months correlation between Eaton and Nuveen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Enhanced and Nuveen Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred 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 Enhanced are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen Preferred go up and down completely randomly.

Pair Corralation between Eaton Vance and Nuveen Preferred

Considering the 90-day investment horizon Eaton Vance Enhanced is expected to under-perform the Nuveen Preferred. In addition to that, Eaton Vance is 1.96 times more volatile than Nuveen Preferred and. It trades about -0.14 of its total potential returns per unit of risk. Nuveen Preferred and is currently generating about 0.06 per unit of volatility. If you would invest  1,939  in Nuveen Preferred and on December 24, 2024 and sell it today you would earn a total of  36.00  from holding Nuveen Preferred and or generate 1.86% 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 Enhanced  vs.  Nuveen Preferred and

Eaton Vance Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Nuveen Preferred

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Preferred and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Nuveen Preferred is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Eaton Vance and Nuveen Preferred

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

The idea behind Eaton Vance Enhanced and Nuveen Preferred and 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.