Correlation Between Blackrock Muniyield and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield 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 Muniyield 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 Muniyield and Eaton Vance Municipal, you can compare the effects of market volatilities on Blackrock Muniyield 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 Muniyield with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Eaton Vance.
Diversification Opportunities for Blackrock Muniyield and Eaton Vance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and Eaton is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and Blackrock Muniyield 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 Muniyield 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 Municipal has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Eaton Vance go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Eaton Vance
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 0.89 times more return on investment than Eaton Vance. However, Blackrock Muniyield is 1.13 times less risky than Eaton Vance. It trades about 0.23 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.18 per unit of risk. If you would invest 1,098 in Blackrock Muniyield on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Blackrock Muniyield or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield vs. Eaton Vance Municipal
Performance |
| Timeline |
| Blackrock Muniyield |
| Eaton Vance Municipal |
Blackrock Muniyield and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Eaton Vance
The main advantage of trading using opposite Blackrock Muniyield and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield 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 Muniyield and Eaton Vance Municipal 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.
| Eaton Vance vs. Munivest Fund | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniholdings Closed |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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