Correlation Between Eagle Mlp and Omni Small-cap

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

By analyzing existing cross correlation between Eagle Mlp Strategy and Omni Small Cap Value, you can compare the effects of market volatilities on Eagle Mlp and Omni Small-cap 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 Mlp with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mlp and Omni Small-cap.

Diversification Opportunities for Eagle Mlp and Omni Small-cap

0.24

Correlation Coefficient

Eagle Mlp  Omni Small-cap

Modest diversification

The 3 months correlation between Eagle and Omni is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mlp Strategy and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Eagle Mlp 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 Mlp Strategy are associated (or correlated) with Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Eagle Mlp i.e., Eagle Mlp and Omni Small-cap go up and down completely randomly.

Pair Corralation between Eagle Mlp and Omni Small-cap

Assuming the 90 days horizon Eagle Mlp Strategy is expected to generate 0.64 times more return on investment than Omni Small-cap. However, Eagle Mlp Strategy is 1.56 times less risky than Omni Small-cap. It trades about 0.18 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about 0.01 per unit of risk. If you would invest  724.00  in Eagle Mlp Strategy on October 14, 2024 and sell it today you would earn a total of  362.00  from holding Eagle Mlp Strategy or generate 50.0% return on investment over 90 days.

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

Eagle Mlp Strategy  vs.  Omni Small Cap Value

Eagle Mlp Strategy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mlp Strategy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eagle Mlp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Omni Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Small Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Eagle Mlp and Omni Small-cap

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

The idea behind Eagle Mlp Strategy and Omni Small Cap Value 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.