Correlation Between BlackRock Health and Eaton Vance

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

Diversification Opportunities for BlackRock Health and Eaton Vance

-0.74

Correlation Coefficient

BlackRock Health  Eaton Vance

Pay attention - limited upside

The 3 months correlation between BlackRock and Eaton is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Health Sciences 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 Health 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 Health Sciences 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 Health i.e., BlackRock Health and Eaton Vance go up and down completely randomly.

Pair Corralation between BlackRock Health and Eaton Vance

Considering the 90-day investment horizon BlackRock Health Sciences is expected to under-perform the Eaton Vance. But the etf apears to be less risky and, when comparing its historical volatility, BlackRock Health Sciences is 1.08 times less risky than Eaton Vance. The etf trades about -0.1 of its potential returns per unit of risk. The Eaton Vance Enhanced is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,063  in Eaton Vance Enhanced on August 31, 2024 and sell it today you would earn a total of  265.00  from holding Eaton Vance Enhanced or generate 12.85% return on investment over 90 days.

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

BlackRock Health Sciences  vs.  Eaton Vance Enhanced

BlackRock Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, BlackRock Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eaton Vance Enhanced

Risk-Adjusted Performance

19 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Enhanced are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with BlackRock Health and Eaton Vance

The main advantage of trading using opposite BlackRock Health and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Health 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 Health Sciences 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.