Correlation Between Firsthand Technology and Eagle Point

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

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

Diversification Opportunities for Firsthand Technology and Eagle Point

-0.79

Correlation Coefficient

Firsthand Technology  Eagle Point

Pay attention - limited upside

The 3 months correlation between Firsthand and Eagle is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Value and Eagle Point Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Income and Firsthand Technology 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 Firsthand Technology Value 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 Income has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Eagle Point go up and down completely randomly.

Pair Corralation between Firsthand Technology and Eagle Point

If you would invest  2,328  in Eagle Point Income on September 2, 2024 and sell it today you would earn a total of  76.00  from holding Eagle Point Income or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Firsthand Technology Value  vs.  Eagle Point Income

Firsthand Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Firsthand Technology Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Firsthand Technology is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Eagle Point Income

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Income are ranked lower than 14 (%) 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.

Pair Trading with Firsthand Technology and Eagle Point

The main advantage of trading using opposite Firsthand Technology and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology 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 Firsthand Technology Value and Eagle Point Income 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.