Correlation Between BlackRock California and Eaton Vance

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

Diversification Opportunities for BlackRock California and Eaton Vance

0.2

Correlation Coefficient

BlackRock California  Eaton Vance

Modest diversification

The 3 months correlation between BlackRock and Eaton is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock California Municipal and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and BlackRock California 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 California Municipal 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 National has no effect on the direction of BlackRock California i.e., BlackRock California and Eaton Vance go up and down completely randomly.

Pair Corralation between BlackRock California and Eaton Vance

Considering the 90-day investment horizon BlackRock California Municipal is expected to generate 1.21 times more return on investment than Eaton Vance. However, BlackRock California is 1.21 times more volatile than Eaton Vance National. It trades about -0.06 of its potential returns per unit of risk. Eaton Vance National is currently generating about -0.09 per unit of risk. If you would invest  1,077  in BlackRock California Municipal on May 7, 2025 and sell it today you would lose (22.00) from holding BlackRock California Municipal or give up 2.04% of portfolio value over 90 days.

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

BlackRock California Municipal  vs.  Eaton Vance National

BlackRock California

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock California Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BlackRock California is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock California and Eaton Vance

The main advantage of trading using opposite BlackRock California and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock California 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 California Municipal and Eaton Vance National 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.