Correlation Between BlackRock Utility and Eaton Vance

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

Diversification Opportunities for BlackRock Utility and Eaton Vance

0.18

Correlation Coefficient

BlackRock Utility  Eaton Vance

Average diversification

The 3 months correlation between BlackRock and Eaton is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Utility Infrastructu and Eaton Vance Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Enhanced and BlackRock Utility 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 Utility Infrastructure 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 Enhanced has no effect on the direction of BlackRock Utility i.e., BlackRock Utility and Eaton Vance go up and down completely randomly.

Pair Corralation between BlackRock Utility and Eaton Vance

Considering the 90-day investment horizon BlackRock Utility Infrastructure is expected to under-perform the Eaton Vance. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock Utility Infrastructure is 1.06 times less risky than Eaton Vance. The stock trades about -0.05 of its potential returns per unit of risk. The Eaton Vance Enhanced is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,305  in Eaton Vance Enhanced on November 29, 2024 and sell it today you would earn a total of  1.00  from holding Eaton Vance Enhanced or generate 0.04% return on investment over 90 days.

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

BlackRock Utility Infrastructu  vs.  Eaton Vance Enhanced

BlackRock Utility

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Utility Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BlackRock Utility is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Eaton Vance Enhanced

Risk-Adjusted Performance

Weak

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

Pair Trading with BlackRock Utility and Eaton Vance

The main advantage of trading using opposite BlackRock Utility and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Utility 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 Utility Infrastructure and Eaton Vance Enhanced 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.