Correlation Between Neogen and Eagle Point

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

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

Diversification Opportunities for Neogen and Eagle Point

-0.78

Correlation Coefficient

Neogen  Eagle Point

Pay attention - limited upside

The 3 months correlation between Neogen and Eagle is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Neogen and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit and Neogen 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 Neogen are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Neogen i.e., Neogen and Eagle Point go up and down completely randomly.

Pair Corralation between Neogen and Eagle Point

Given the investment horizon of 90 days Neogen is expected to under-perform the Eagle Point. In addition to that, Neogen is 10.43 times more volatile than Eagle Point Credit. It trades about -0.1 of its total potential returns per unit of risk. Eagle Point Credit is currently generating about 0.12 per unit of volatility. If you would invest  2,441  in Eagle Point Credit on October 22, 2024 and sell it today you would earn a total of  51.00  from holding Eagle Point Credit or generate 2.09% return on investment over 90 days.

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

Neogen  vs.  Eagle Point Credit

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Eagle Point Credit

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Eagle Point is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Neogen and Eagle Point

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

The idea behind Neogen and Eagle Point Credit 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.