Correlation Between Eaton Vance and Blackrock Muniholdings

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

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

Diversification Opportunities for Eaton Vance and Blackrock Muniholdings

0.7

Correlation Coefficient

Eaton Vance  Blackrock Muniholdings

Poor diversification

The 3 months correlation between Eaton and Blackrock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance New and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Eaton Vance 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 Eaton Vance New are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Eaton Vance i.e., Eaton Vance and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Eaton Vance and Blackrock Muniholdings

Considering the 90-day investment horizon Eaton Vance New is expected to generate 0.94 times more return on investment than Blackrock Muniholdings. However, Eaton Vance New is 1.07 times less risky than Blackrock Muniholdings. It trades about 0.0 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about -0.01 per unit of risk. If you would invest  961.00  in Eaton Vance New on September 30, 2024 and sell it today you would lose (3.00) from holding Eaton Vance New or give up 0.31% of portfolio value over 90 days.

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

Eaton Vance New  vs.  Blackrock Muniholdings Closed

Eaton Vance New

Risk-Adjusted Performance

0 of 100

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.

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniholdings Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Eaton Vance and Blackrock Muniholdings

The main advantage of trading using opposite Eaton Vance and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Blackrock Muniholdings 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 Blackrock Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.

The idea behind Eaton Vance New and Blackrock Muniholdings Closed 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.