Correlation Between Eaton Vance and Nuveen New

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

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

Diversification Opportunities for Eaton Vance and Nuveen New

0.54

Correlation Coefficient

Eaton Vance  Nuveen New

Very weak diversification

The 3 months correlation between Eaton and Nuveen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 Tax are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Eaton Vance i.e., Eaton Vance and Nuveen New go up and down completely randomly.

Pair Corralation between Eaton Vance and Nuveen New

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 1.22 times more return on investment than Nuveen New. However, Eaton Vance is 1.22 times more volatile than Nuveen New York. It trades about 0.07 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.06 per unit of risk. If you would invest  670.00  in Eaton Vance Tax on September 2, 2024 and sell it today you would earn a total of  187.00  from holding Eaton Vance Tax or generate 27.91% return on investment over 90 days.

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

Eaton Vance Tax  vs.  Nuveen New York

Eaton Vance Tax

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuveen New York

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Eaton Vance and Nuveen New

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

The idea behind Eaton Vance Tax and Nuveen New York 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.