Correlation Between Eagle Point and Eagle Pointome

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

By analyzing existing cross correlation between Eagle Point Credit and Eagle Pointome, you can compare the effects of market volatilities on Eagle Point and Eagle Pointome 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 Eagle Point with a short position of Eagle Pointome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Eagle Pointome.

Diversification Opportunities for Eagle Point and Eagle Pointome

0.09

Correlation Coefficient

Eagle Point  Eagle Pointome

Significant diversification

The 3 months correlation between Eagle and Eagle is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Eagle Pointome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pointome and Eagle Point 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 Eagle Point Credit are associated (or correlated) with Eagle Pointome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Pointome has no effect on the direction of Eagle Point i.e., Eagle Point and Eagle Pointome go up and down completely randomly.

Pair Corralation between Eagle Point and Eagle Pointome

Considering the 90-day investment horizon Eagle Point is expected to generate 1.53 times less return on investment than Eagle Pointome. But when comparing it to its historical volatility, Eagle Point Credit is 1.12 times less risky than Eagle Pointome. It trades about 0.05 of its potential returns per unit of risk. Eagle Pointome is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,146  in Eagle Pointome on September 2, 2024 and sell it today you would earn a total of  410.00  from holding Eagle Pointome or generate 35.78% return on investment over 90 days.

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

Eagle Point Credit  vs.  Eagle Pointome

Eagle Point Credit

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eagle Pointome

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Pointome are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Eagle Pointome is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eagle Point and Eagle Pointome

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

The idea behind Eagle Point Credit and Eagle Pointome 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.