Correlation Between Eaton Vance and BlackRock Energy

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

By analyzing existing cross correlation between Eaton Vance Tax and BlackRock Energy and, you can compare the effects of market volatilities on Eaton Vance and BlackRock Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and BlackRock Energy.

Diversification Opportunities for Eaton Vance and BlackRock Energy

0.36

Correlation Coefficient

Eaton Vance  BlackRock Energy

Weak diversification

The 3 months correlation between Eaton and BlackRock is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and BlackRock Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Energy 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 Tax are associated (or correlated) with BlackRock Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Energy has no effect on the direction of Eaton Vance i.e., Eaton Vance and BlackRock Energy go up and down completely randomly.

Pair Corralation between Eaton Vance and BlackRock Energy

Considering the 90-day investment horizon Eaton Vance Tax is expected to under-perform the BlackRock Energy. But the fund apears to be less risky and, when comparing its historical volatility, Eaton Vance Tax is 1.0 times less risky than BlackRock Energy. The fund trades about -0.03 of its potential returns per unit of risk. The BlackRock Energy and is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,224  in BlackRock Energy and on December 28, 2024 and sell it today you would earn a total of  143.00  from holding BlackRock Energy and or generate 11.68% return on investment over 90 days.

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

Eaton Vance Tax  vs.  BlackRock Energy and

Eaton Vance Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance Tax has generated negative risk-adjusted returns adding no value to fund investors. 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 Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical and fundamental indicators, BlackRock Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Eaton Vance and BlackRock Energy

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

The idea behind Eaton Vance Tax and BlackRock Energy and 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.