Correlation Between Pioneer Municipal and Eaton Vance

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

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

Diversification Opportunities for Pioneer Municipal and Eaton Vance

0.42

Correlation Coefficient

Pioneer Municipal  Eaton Vance

Very weak diversification

The 3 months correlation between Pioneer and Eaton is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Municipal High and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and Pioneer Municipal 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 Pioneer Municipal High 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 Senior has no effect on the direction of Pioneer Municipal i.e., Pioneer Municipal and Eaton Vance go up and down completely randomly.

Pair Corralation between Pioneer Municipal and Eaton Vance

Considering the 90-day investment horizon Pioneer Municipal High is expected to generate 1.28 times more return on investment than Eaton Vance. However, Pioneer Municipal is 1.28 times more volatile than Eaton Vance Senior. It trades about -0.01 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about -0.13 per unit of risk. If you would invest  838.00  in Pioneer Municipal High on December 28, 2024 and sell it today you would lose (4.00) from holding Pioneer Municipal High or give up 0.48% of portfolio value over 90 days.

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

Pioneer Municipal High  vs.  Eaton Vance Senior

Pioneer Municipal High

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Municipal High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Pioneer Municipal is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Eaton Vance Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pioneer Municipal and Eaton Vance

The main advantage of trading using opposite Pioneer Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Municipal 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 Pioneer Municipal High and Eaton Vance Senior 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.