Correlation Between Priorityome Fund and Eagle Point

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

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

Diversification Opportunities for Priorityome Fund and Eagle Point

0.41

Correlation Coefficient

Priorityome Fund  Eagle Point

Very weak diversification

The 3 months correlation between Priorityome and Eagle is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Priorityome Fund 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 Priorityome Fund 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 Priorityome Fund 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 Priorityome Fund i.e., Priorityome Fund and Eagle Point go up and down completely randomly.

Pair Corralation between Priorityome Fund and Eagle Point

Assuming the 90 days trading horizon Priorityome Fund is expected to generate 5.73 times more return on investment than Eagle Point. However, Priorityome Fund is 5.73 times more volatile than Eagle Point Credit. It trades about -0.01 of its potential returns per unit of risk. Eagle Point Credit is currently generating about -0.39 per unit of risk. If you would invest  2,225  in Priorityome Fund on October 7, 2024 and sell it today you would lose (25.00) from holding Priorityome Fund or give up 1.12% of portfolio value over 90 days.

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

Priorityome Fund  vs.  Eagle Point Credit

Priorityome Fund

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Priorityome Fund are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Priorityome Fund is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Eagle Point Credit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eagle Point Credit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Eagle Point is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Priorityome Fund and Eagle Point

The main advantage of trading using opposite Priorityome Fund and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Priorityome Fund 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 Priorityome Fund 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.