Correlation Between Eagle Mid and Eagle Capital

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

By analyzing existing cross correlation between Eagle Mid Cap and Eagle Capital Appreciation, you can compare the effects of market volatilities on Eagle Mid and Eagle Capital 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 Mid with a short position of Eagle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mid and Eagle Capital.

Diversification Opportunities for Eagle Mid and Eagle Capital

0.93

Correlation Coefficient

Eagle Mid  Eagle Capital

Almost no diversification

The 3 months correlation between Eagle and Eagle is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mid Cap and Eagle Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Apprec and Eagle Mid 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 Mid Cap are associated (or correlated) with Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Apprec has no effect on the direction of Eagle Mid i.e., Eagle Mid and Eagle Capital go up and down completely randomly.

Pair Corralation between Eagle Mid and Eagle Capital

Assuming the 90 days horizon Eagle Mid Cap is expected to under-perform the Eagle Capital. In addition to that, Eagle Mid is 1.01 times more volatile than Eagle Capital Appreciation. It trades about -0.16 of its total potential returns per unit of risk. Eagle Capital Appreciation is currently generating about -0.1 per unit of volatility. If you would invest  3,122  in Eagle Capital Appreciation on November 28, 2024 and sell it today you would lose (366.00) from holding Eagle Capital Appreciation or give up 11.72% of portfolio value over 90 days.

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

Eagle Mid Cap  vs.  Eagle Capital Appreciation

Eagle Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Eagle Capital Apprec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Mid and Eagle Capital

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

The idea behind Eagle Mid Cap and Eagle Capital Appreciation 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.