Correlation Between Eagle Point and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Sapiens International 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 Sapiens International 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 Sapiens International, you can compare the effects of market volatilities on Eagle Point and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Sapiens International.
Diversification Opportunities for Eagle Point and Sapiens International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eagle and Sapiens is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Eagle Point i.e., Eagle Point and Sapiens International go up and down completely randomly.
Pair Corralation between Eagle Point and Sapiens International
Given the investment horizon of 90 days Eagle Point Credit is expected to generate 0.18 times more return on investment than Sapiens International. However, Eagle Point Credit is 5.44 times less risky than Sapiens International. It trades about 0.12 of its potential returns per unit of risk. Sapiens International is currently generating about -0.01 per unit of risk. If you would invest 2,452 in Eagle Point Credit on December 3, 2024 and sell it today you would earn a total of 52.00 from holding Eagle Point Credit or generate 2.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eagle Point Credit vs. Sapiens International
Performance |
Timeline |
Eagle Point Credit |
Sapiens International |
Eagle Point and Sapiens International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eagle Point and Sapiens International
The main advantage of trading using opposite Eagle Point and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.Eagle Point vs. BRP Inc | Eagle Point vs. Modine Manufacturing | Eagle Point vs. Adient PLC | Eagle Point vs. BioNTech SE |
Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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