Correlation Between Eaton Vance and Bny Mellon

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

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

Diversification Opportunities for Eaton Vance and Bny Mellon

0.18

Correlation Coefficient

Eaton Vance  Bny Mellon

Average diversification

The 3 months correlation between Eaton and Bny is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and Bny Mellon Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Municipalome 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 National are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Municipalome has no effect on the direction of Eaton Vance i.e., Eaton Vance and Bny Mellon go up and down completely randomly.

Pair Corralation between Eaton Vance and Bny Mellon

Considering the 90-day investment horizon Eaton Vance is expected to generate 4.65 times less return on investment than Bny Mellon. But when comparing it to its historical volatility, Eaton Vance National is 1.25 times less risky than Bny Mellon. It trades about 0.07 of its potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  718.00  in Bny Mellon Municipalome on September 13, 2024 and sell it today you would earn a total of  24.00  from holding Bny Mellon Municipalome or generate 3.34% return on investment over 90 days.

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

Eaton Vance National  vs.  Bny Mellon Municipalome

Eaton Vance National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bny Mellon Municipalome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Municipalome has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Bny Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eaton Vance and Bny Mellon

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

The idea behind Eaton Vance National and Bny Mellon Municipalome 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.