Correlation Between Nuveen California and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Nuveen California 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 California 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 California Amt and Eaton Vance California, you can compare the effects of market volatilities on Nuveen California 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 California with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Eaton Vance.

Diversification Opportunities for Nuveen California and Eaton Vance

0.7

Correlation Coefficient

Nuveen California  Eaton Vance

Poor diversification

The 3 months correlation between Nuveen and Eaton is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Amt and Eaton Vance California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance California and Nuveen California 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 California Amt 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 California has no effect on the direction of Nuveen California i.e., Nuveen California and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen California and Eaton Vance

Considering the 90-day investment horizon Nuveen California Amt is expected to under-perform the Eaton Vance. In addition to that, Nuveen California is 1.48 times more volatile than Eaton Vance California. It trades about -0.04 of its total potential returns per unit of risk. Eaton Vance California is currently generating about -0.03 per unit of volatility. If you would invest  1,078  in Eaton Vance California on September 3, 2024 and sell it today you would lose (13.00) from holding Eaton Vance California or give up 1.21% of portfolio value over 90 days.

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

Nuveen California Amt  vs.  Eaton Vance California

Nuveen California Amt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen California Amt has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Nuveen California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance California

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance California has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nuveen California and Eaton Vance

The main advantage of trading using opposite Nuveen California and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California 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 California Amt and Eaton Vance California 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.