Correlation Between Eagle Point and TRINL

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

Diversification Opportunities for Eagle Point and TRINL

0.31

Correlation Coefficient

Eagle Point  TRINL

Weak diversification

The 3 months correlation between Eagle and TRINL is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and TRINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRINL 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 TRINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRINL has no effect on the direction of Eagle Point i.e., Eagle Point and TRINL go up and down completely randomly.

Pair Corralation between Eagle Point and TRINL

Given the investment horizon of 90 days Eagle Point Credit is expected to under-perform the TRINL. In addition to that, Eagle Point is 2.43 times more volatile than TRINL. It trades about -0.01 of its total potential returns per unit of risk. TRINL is currently generating about 0.11 per unit of volatility. If you would invest  2,473  in TRINL on September 12, 2024 and sell it today you would earn a total of  29.00  from holding TRINL or generate 1.17% return on investment over 90 days.

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

Eagle Point Credit  vs.  TRINL

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 fairly strong fundamental indicators, Eagle Point is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TRINL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRINL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, TRINL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Eagle Point and TRINL

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

The idea behind Eagle Point Credit and TRINL 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.