Correlation Between Eaton Vance and BlackRock Core

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

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

Diversification Opportunities for Eaton Vance and BlackRock Core

-0.48

Correlation Coefficient

Eaton Vance  BlackRock Core

Very good diversification

The 3 months correlation between Eaton and BlackRock is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Senior and BlackRock Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Core Bond 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 Senior are associated (or correlated) with BlackRock Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Core Bond has no effect on the direction of Eaton Vance i.e., Eaton Vance and BlackRock Core go up and down completely randomly.

Pair Corralation between Eaton Vance and BlackRock Core

Considering the 90-day investment horizon Eaton Vance Senior is expected to under-perform the BlackRock Core. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance Senior is 1.53 times less risky than BlackRock Core. The stock trades about -0.11 of its potential returns per unit of risk. The BlackRock Core Bond is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,017  in BlackRock Core Bond on December 29, 2024 and sell it today you would earn a total of  49.00  from holding BlackRock Core Bond or generate 4.82% return on investment over 90 days.

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

Eaton Vance Senior  vs.  BlackRock Core Bond

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.

BlackRock Core Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Core Bond are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical indicators, BlackRock Core is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Eaton Vance and BlackRock Core

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

The idea behind Eaton Vance Senior and BlackRock Core Bond 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..