Correlation Between Eagle Point and OFS Capital
Can any of the company-specific risk be diversified away by investing in both Eagle Point and OFS Capital 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 OFS Capital 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 OFS Capital Corp, you can compare the effects of market volatilities on Eagle Point and OFS Capital 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 OFS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and OFS Capital.
Diversification Opportunities for Eagle Point and OFS Capital
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eagle and OFS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and OFS Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Capital Corp 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 OFS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Capital Corp has no effect on the direction of Eagle Point i.e., Eagle Point and OFS Capital go up and down completely randomly.
Pair Corralation between Eagle Point and OFS Capital
Considering the 90-day investment horizon Eagle Point Credit is expected to under-perform the OFS Capital. In addition to that, Eagle Point is 1.43 times more volatile than OFS Capital Corp. It trades about -0.31 of its total potential returns per unit of risk. OFS Capital Corp is currently generating about -0.08 per unit of volatility. If you would invest 813.00 in OFS Capital Corp on August 24, 2024 and sell it today you would lose (9.00) from holding OFS Capital Corp or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. OFS Capital Corp
Performance |
| Timeline |
| Eagle Point Credit |
| OFS Capital Corp |
Eagle Point and OFS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and OFS Capital
The main advantage of trading using opposite Eagle Point and OFS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, OFS Capital 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 OFS Capital will offset losses from the drop in OFS Capital'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 |
| OFS Capital vs. Invesco Advantage MIT | OFS Capital vs. Invesco Municipal Trust | OFS Capital vs. Invesco California Value | OFS Capital vs. Victory Capital Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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