Correlation Between Blackrock Enhanced and Eaton Vance

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

Diversification Opportunities for Blackrock Enhanced and Eaton Vance

0.91

Correlation Coefficient

Blackrock Enhanced  Eaton Vance

Almost no diversification

The 3 months correlation between Blackrock and Eaton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Capital and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk and Blackrock Enhanced 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 Enhanced Capital 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 Risk has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Eaton Vance go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and Eaton Vance

Considering the 90-day investment horizon Blackrock Enhanced Capital is expected to generate 0.8 times more return on investment than Eaton Vance. However, Blackrock Enhanced Capital is 1.25 times less risky than Eaton Vance. It trades about 0.15 of its potential returns per unit of risk. Eaton Vance Risk is currently generating about 0.07 per unit of risk. If you would invest  1,991  in Blackrock Enhanced Capital on September 12, 2024 and sell it today you would earn a total of  29.00  from holding Blackrock Enhanced Capital or generate 1.46% return on investment over 90 days.

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

Blackrock Enhanced Capital  vs.  Eaton Vance Risk

Blackrock Enhanced

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Capital are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly weak forward indicators, Blackrock Enhanced may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eaton Vance Risk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Risk are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Blackrock Enhanced and Eaton Vance

The main advantage of trading using opposite Blackrock Enhanced and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced 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 Enhanced Capital and Eaton Vance Risk 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.