Correlation Between Eaton Vance and BlackRock Health

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

Diversification Opportunities for Eaton Vance and BlackRock Health

-0.61

Correlation Coefficient

Eaton Vance  BlackRock Health

Excellent diversification

The 3 months correlation between Eaton and BlackRock is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and BlackRock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Health Sciences 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 Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Health Sciences has no effect on the direction of Eaton Vance i.e., Eaton Vance and BlackRock Health go up and down completely randomly.

Pair Corralation between Eaton Vance and BlackRock Health

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 1.02 times more return on investment than BlackRock Health. However, Eaton Vance is 1.02 times more volatile than BlackRock Health Sciences. It trades about 0.19 of its potential returns per unit of risk. BlackRock Health Sciences is currently generating about -0.1 per unit of risk. If you would invest  1,371  in Eaton Vance Tax on August 31, 2024 and sell it today you would earn a total of  125.00  from holding Eaton Vance Tax or generate 9.12% return on investment over 90 days.

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

Eaton Vance Tax  vs.  BlackRock Health Sciences

Eaton Vance Tax

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Eaton Vance may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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.

Pair Trading with Eaton Vance and BlackRock Health

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

The idea behind Eaton Vance Tax and BlackRock Health Sciences 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.