Correlation Between Nuveen Dividend and Eaton Vance

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

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

Diversification Opportunities for Nuveen Dividend and Eaton Vance

0.17

Correlation Coefficient

Nuveen Dividend  Eaton Vance

Average diversification

The 3 months correlation between Nuveen and Eaton is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Advantage and Eaton Vance Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Floating and Nuveen Dividend 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 Nuveen Dividend Advantage 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 Floating has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen Dividend and Eaton Vance

Considering the 90-day investment horizon Nuveen Dividend Advantage is expected to generate 0.78 times more return on investment than Eaton Vance. However, Nuveen Dividend Advantage is 1.29 times less risky than Eaton Vance. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Floating is currently generating about -0.12 per unit of risk. If you would invest  1,128  in Nuveen Dividend Advantage on December 24, 2024 and sell it today you would earn a total of  37.00  from holding Nuveen Dividend Advantage or generate 3.28% return on investment over 90 days.

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

Nuveen Dividend Advantage  vs.  Eaton Vance Floating

Nuveen Dividend Advantage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dividend Advantage are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Nuveen Dividend is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Eaton Vance Floating

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Floating has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental 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 Nuveen Dividend and Eaton Vance

The main advantage of trading using opposite Nuveen Dividend and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dividend 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 Nuveen Dividend Advantage and Eaton Vance Floating 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.