Correlation Between Eagle Point and Apple

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

Diversification Opportunities for Eagle Point and Apple

-0.6

Correlation Coefficient

Eagle Point  Apple

Excellent diversification

The 3 months correlation between Eagle and Apple is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Eagle Point i.e., Eagle Point and Apple go up and down completely randomly.

Pair Corralation between Eagle Point and Apple

Given the investment horizon of 90 days Eagle Point Credit is expected to generate 0.18 times more return on investment than Apple. However, Eagle Point Credit is 5.45 times less risky than Apple. It trades about 0.16 of its potential returns per unit of risk. Apple Inc is currently generating about -0.14 per unit of risk. If you would invest  2,237  in Eagle Point Credit on December 25, 2024 and sell it today you would earn a total of  68.00  from holding Eagle Point Credit or generate 3.04% return on investment over 90 days.

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

Eagle Point Credit  vs.  Apple Inc

Eagle Point Credit

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Eagle Point is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Eagle Point and Apple

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

The idea behind Eagle Point Credit and Apple Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.