Correlation Between Eagle Point and Ares Dynamic
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Ares Dynamic 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 Eagle Point and Ares Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Point Credit and Ares Dynamic Credit, you can compare the effects of market volatilities on Eagle Point and Ares Dynamic 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 Eagle Point with a short position of Ares Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Ares Dynamic.
Diversification Opportunities for Eagle Point and Ares Dynamic
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Ares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Ares Dynamic Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Dynamic Credit and Eagle Point 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 Eagle Point Credit are associated (or correlated) with Ares Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Dynamic Credit has no effect on the direction of Eagle Point i.e., Eagle Point and Ares Dynamic go up and down completely randomly.
Pair Corralation between Eagle Point and Ares Dynamic
Considering the 90-day investment horizon Eagle Point is expected to generate 1.77 times less return on investment than Ares Dynamic. In addition to that, Eagle Point is 1.28 times more volatile than Ares Dynamic Credit. It trades about 0.05 of its total potential returns per unit of risk. Ares Dynamic Credit is currently generating about 0.12 per unit of volatility. If you would invest 972.00 in Ares Dynamic Credit on August 27, 2024 and sell it today you would earn a total of 555.00 from holding Ares Dynamic Credit or generate 57.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. Ares Dynamic Credit
Performance |
| Timeline |
| Eagle Point Credit |
| Ares Dynamic Credit |
Eagle Point and Ares Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Ares Dynamic
The main advantage of trading using opposite Eagle Point and Ares Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Ares Dynamic 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 Ares Dynamic will offset losses from the drop in Ares Dynamic's long position.| Eagle Point vs. Cornerstone Strategic Return | Eagle Point vs. Cornerstone Strategic Value | Eagle Point vs. Oxford Square Capital | Eagle Point vs. Guggenheim Strategic Opportunities |
| Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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