Correlation Between Nuveen New and Eaton Vance

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

Diversification Opportunities for Nuveen New and Eaton Vance

0.84

Correlation Coefficient

Nuveen New  Eaton Vance

Very poor diversification

The 3 months correlation between Nuveen and Eaton is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Eaton Vance New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance New and Nuveen New 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 New York 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 New has no effect on the direction of Nuveen New i.e., Nuveen New and Eaton Vance go up and down completely randomly.

Pair Corralation between Nuveen New and Eaton Vance

Considering the 90-day investment horizon Nuveen New is expected to generate 2.29 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Nuveen New York is 1.23 times less risky than Eaton Vance. It trades about 0.02 of its potential returns per unit of risk. Eaton Vance New is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  847.00  in Eaton Vance New on December 2, 2024 and sell it today you would earn a total of  137.00  from holding Eaton Vance New or generate 16.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Nuveen New York  vs.  Eaton Vance New

Nuveen New York

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Eaton Vance New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen New and Eaton Vance

The main advantage of trading using opposite Nuveen New and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New 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 New York and Eaton Vance New 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.