Correlation Between Eagle Point and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Eagle Point and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Cornerstone Strategic.
Diversification Opportunities for Eagle Point and Cornerstone Strategic
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Cornerstone is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Eagle Point i.e., Eagle Point and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Eagle Point and Cornerstone Strategic
Considering the 90-day investment horizon Eagle Point Credit is expected to under-perform the Cornerstone Strategic. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Point Credit is 1.14 times less risky than Cornerstone Strategic. The stock trades about -0.31 of its potential returns per unit of risk. The Cornerstone Strategic Return is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 822.00 in Cornerstone Strategic Return on August 24, 2024 and sell it today you would earn a total of 69.00 from holding Cornerstone Strategic Return or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Eagle Point Credit |
| Cornerstone Strategic |
Eagle Point and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Cornerstone Strategic
The main advantage of trading using opposite Eagle Point and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic'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 |
| Cornerstone Strategic vs. MFS Investment Grade | Cornerstone Strategic vs. Eaton Vance National | Cornerstone Strategic vs. Blackrock Muniyield Quality | Cornerstone Strategic vs. Munivest Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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