Correlation Between Sixth Street and Eagle Pointome

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

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

Diversification Opportunities for Sixth Street and Eagle Pointome

0.4

Correlation Coefficient

Sixth Street  Eagle Pointome

Very weak diversification

The 3 months correlation between Sixth and Eagle is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sixth Street Specialty and Eagle Pointome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pointome and Sixth Street 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 Sixth Street Specialty are associated (or correlated) with Eagle Pointome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Pointome has no effect on the direction of Sixth Street i.e., Sixth Street and Eagle Pointome go up and down completely randomly.

Pair Corralation between Sixth Street and Eagle Pointome

Given the investment horizon of 90 days Sixth Street Specialty is expected to generate 0.97 times more return on investment than Eagle Pointome. However, Sixth Street Specialty is 1.03 times less risky than Eagle Pointome. It trades about 0.16 of its potential returns per unit of risk. Eagle Pointome is currently generating about 0.01 per unit of risk. If you would invest  2,063  in Sixth Street Specialty on December 27, 2024 and sell it today you would earn a total of  187.00  from holding Sixth Street Specialty or generate 9.06% return on investment over 90 days.

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

Sixth Street Specialty  vs.  Eagle Pointome

Sixth Street Specialty

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sixth Street Specialty are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Sixth Street may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eagle Pointome

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sixth Street and Eagle Pointome

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

The idea behind Sixth Street Specialty and Eagle Pointome 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..