Correlation Between Nuveen Massachusetts and Eaton Vance

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

Diversification Opportunities for Nuveen Massachusetts and Eaton Vance

0.77

Correlation Coefficient

Nuveen Massachusetts  Eaton Vance

Poor diversification

The 3 months correlation between Nuveen and Eaton is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Massachusetts Quality 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 Nuveen Massachusetts 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 Massachusetts Quality 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 Nuveen Massachusetts i.e., Nuveen Massachusetts and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen Massachusetts and Eaton Vance

Considering the 90-day investment horizon Nuveen Massachusetts Quality is expected to generate 0.77 times more return on investment than Eaton Vance. However, Nuveen Massachusetts Quality is 1.29 times less risky than Eaton Vance. It trades about 0.23 of its potential returns per unit of risk. Eaton Vance National is currently generating about 0.09 per unit of risk. If you would invest  1,109  in Nuveen Massachusetts Quality on December 27, 2024 and sell it today you would earn a total of  68.00  from holding Nuveen Massachusetts Quality or generate 6.13% return on investment over 90 days.

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

Nuveen Massachusetts Quality  vs.  Eaton Vance National

Nuveen Massachusetts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Massachusetts Quality are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively uncertain primary indicators, Nuveen Massachusetts may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eaton Vance National

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance National are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. 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 Nuveen Massachusetts and Eaton Vance

The main advantage of trading using opposite Nuveen Massachusetts and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Massachusetts 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 Massachusetts Quality 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.