Correlation Between Eagle Point and Ellsworth Growth

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

By analyzing existing cross correlation between Eagle Point Income and Ellsworth Growth and, you can compare the effects of market volatilities on Eagle Point and Ellsworth Growth 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 Ellsworth Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Ellsworth Growth.

Diversification Opportunities for Eagle Point and Ellsworth Growth

-0.26

Correlation Coefficient

Eagle Point  Ellsworth Growth

Very good diversification

The 3 months correlation between Eagle and Ellsworth is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and Ellsworth Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellsworth Growth 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 Income are associated (or correlated) with Ellsworth Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellsworth Growth has no effect on the direction of Eagle Point i.e., Eagle Point and Ellsworth Growth go up and down completely randomly.

Pair Corralation between Eagle Point and Ellsworth Growth

Given the investment horizon of 90 days Eagle Point Income is expected to generate 0.45 times more return on investment than Ellsworth Growth. However, Eagle Point Income is 2.21 times less risky than Ellsworth Growth. It trades about 0.15 of its potential returns per unit of risk. Ellsworth Growth and is currently generating about 0.02 per unit of risk. If you would invest  2,348  in Eagle Point Income on December 30, 2024 and sell it today you would earn a total of  79.00  from holding Eagle Point Income or generate 3.36% return on investment over 90 days.

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

Eagle Point Income  vs.  Ellsworth Growth and

Eagle Point Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ellsworth Growth

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ellsworth Growth and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Ellsworth Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eagle Point and Ellsworth Growth

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

The idea behind Eagle Point Income and Ellsworth Growth and 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.