Correlation Between Munivest Fund and Eaton Vance

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

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

Diversification Opportunities for Munivest Fund and Eaton Vance

0.86

Correlation Coefficient

Munivest Fund  Eaton Vance

Very poor diversification

The 3 months correlation between Munivest and Eaton is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and Munivest Fund 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 Munivest Fund 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 National has no effect on the direction of Munivest Fund i.e., Munivest Fund and Eaton Vance go up and down completely randomly.

Pair Corralation between Munivest Fund and Eaton Vance

Considering the 90-day investment horizon Munivest Fund is expected to generate 3.27 times less return on investment than Eaton Vance. In addition to that, Munivest Fund is 1.08 times more volatile than Eaton Vance National. It trades about 0.1 of its total potential returns per unit of risk. Eaton Vance National is currently generating about 0.34 per unit of volatility. If you would invest  1,655  in Eaton Vance National on December 2, 2024 and sell it today you would earn a total of  70.00  from holding Eaton Vance National or generate 4.23% return on investment over 90 days.

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

Munivest Fund  vs.  Eaton Vance National

Munivest Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Munivest Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Eaton Vance National

Risk-Adjusted Performance

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Munivest Fund and Eaton Vance

The main advantage of trading using opposite Munivest Fund and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munivest Fund 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 Munivest Fund and Eaton Vance National 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.