Correlation Between Us Government and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Us Government and Eagle Small 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 Us Government and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Eagle Small Cap, you can compare the effects of market volatilities on Us Government and Eagle Small 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 Us Government with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Eagle Small.
Diversification Opportunities for Us Government and Eagle Small
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CGTCX and Eagle is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Us Government 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 Us Government Securities are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Us Government i.e., Us Government and Eagle Small go up and down completely randomly.
Pair Corralation between Us Government and Eagle Small
Assuming the 90 days horizon Us Government is expected to generate 19.52 times less return on investment than Eagle Small. But when comparing it to its historical volatility, Us Government Securities is 4.01 times less risky than Eagle Small. It trades about 0.06 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,485 in Eagle Small Cap on September 1, 2024 and sell it today you would earn a total of 225.00 from holding Eagle Small Cap or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Us Government Securities vs. Eagle Small Cap
Performance |
| Timeline |
| Us Government Securities |
| Eagle Small Cap |
Us Government and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Eagle Small
The main advantage of trading using opposite Us Government and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Eagle Small 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 Small will offset losses from the drop in Eagle Small's long position.| Us Government vs. Wasatch Global Opportunities | Us Government vs. Commonwealth Global Fund | Us Government vs. Ms Global Fixed | Us Government vs. Federated Global Allocation |
| Eagle Small vs. Sarofim Equity | Eagle Small vs. Ab Select Equity | Eagle Small vs. Huber Capital Equity | Eagle Small vs. Cutler Equity |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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