Correlation Between BlackRock Capital and Eaton Vance

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

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

Diversification Opportunities for BlackRock Capital and Eaton Vance

0.62

Correlation Coefficient

BlackRock Capital  Eaton Vance

Poor diversification

The 3 months correlation between BlackRock and Eaton is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and BlackRock Capital 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 BlackRock Capital Allocation 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 Senior has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Eaton Vance go up and down completely randomly.

Pair Corralation between BlackRock Capital and Eaton Vance

Given the investment horizon of 90 days BlackRock Capital Allocation is expected to generate 1.47 times more return on investment than Eaton Vance. However, BlackRock Capital is 1.47 times more volatile than Eaton Vance Senior. It trades about 0.04 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about -0.11 per unit of risk. If you would invest  1,427  in BlackRock Capital Allocation on December 28, 2024 and sell it today you would earn a total of  19.00  from holding BlackRock Capital Allocation or generate 1.33% return on investment over 90 days.

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

BlackRock Capital Allocation  vs.  Eaton Vance Senior

BlackRock Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Capital Allocation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Eaton Vance Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock Capital and Eaton Vance

The main advantage of trading using opposite BlackRock Capital and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital 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 BlackRock Capital Allocation and Eaton Vance Senior 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.