Correlation Between Eagle Small and William Blair

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

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

Diversification Opportunities for Eagle Small and William Blair

0.67

Correlation Coefficient

Eagle Small  William Blair

Poor diversification

The 3 months correlation between Eagle and William is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small Cap and William Blair Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Small and Eagle Small 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 Small Cap are associated (or correlated) with William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Eagle Small i.e., Eagle Small and William Blair go up and down completely randomly.

Pair Corralation between Eagle Small and William Blair

Assuming the 90 days horizon Eagle Small Cap is expected to generate 0.98 times more return on investment than William Blair. However, Eagle Small Cap is 1.02 times less risky than William Blair. It trades about -0.08 of its potential returns per unit of risk. William Blair Small is currently generating about -0.13 per unit of risk. If you would invest  2,051  in Eagle Small Cap on December 29, 2024 and sell it today you would lose (146.00) from holding Eagle Small Cap or give up 7.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Eagle Small Cap  vs.  William Blair Small

Eagle Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Small Cap 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.

William Blair Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days William Blair Small 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 Small and William Blair

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

The idea behind Eagle Small Cap and William Blair Small 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.