Correlation Between Guggenheim Taxable and Eaton Vance

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

By analyzing existing cross correlation between Guggenheim Taxable Municipal and Eaton Vance Tax, you can compare the effects of market volatilities on Guggenheim Taxable and Eaton Vance 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 Guggenheim Taxable with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Taxable and Eaton Vance.

Diversification Opportunities for Guggenheim Taxable and Eaton Vance

-0.88

Correlation Coefficient

Guggenheim Taxable  Eaton Vance

Pay attention - limited upside

The 3 months correlation between Guggenheim and Eaton is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Taxable Municipal and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Guggenheim Taxable 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 Guggenheim Taxable Municipal are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Tax has no effect on the direction of Guggenheim Taxable i.e., Guggenheim Taxable and Eaton Vance go up and down completely randomly.

Pair Corralation between Guggenheim Taxable and Eaton Vance

Given the investment horizon of 90 days Guggenheim Taxable is expected to generate 4.25 times less return on investment than Eaton Vance. In addition to that, Guggenheim Taxable is 1.06 times more volatile than Eaton Vance Tax. It trades about 0.04 of its total potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.18 per unit of volatility. If you would invest  1,081  in Eaton Vance Tax on September 2, 2024 and sell it today you would earn a total of  432.00  from holding Eaton Vance Tax or generate 39.96% return on investment over 90 days.

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

Guggenheim Taxable Municipal  vs.  Eaton Vance Tax

Guggenheim Taxable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Taxable Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Eaton Vance Tax

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guggenheim Taxable and Eaton Vance

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

The idea behind Guggenheim Taxable Municipal and Eaton Vance Tax 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.