Correlation Between Eagle Point and Special Opportunities
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Special Opportunities 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 Special Opportunities 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 Special Opportunities Closed, you can compare the effects of market volatilities on Eagle Point and Special Opportunities 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 Special Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Special Opportunities.
Diversification Opportunities for Eagle Point and Special Opportunities
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Special is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Special Opportunities Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Special Opportunities 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 Special Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Special Opportunities has no effect on the direction of Eagle Point i.e., Eagle Point and Special Opportunities go up and down completely randomly.
Pair Corralation between Eagle Point and Special Opportunities
Considering the 90-day investment horizon Eagle Point is expected to generate 1.58 times less return on investment than Special Opportunities. In addition to that, Eagle Point is 1.35 times more volatile than Special Opportunities Closed. It trades about 0.05 of its total potential returns per unit of risk. Special Opportunities Closed is currently generating about 0.12 per unit of volatility. If you would invest 998.00 in Special Opportunities Closed on August 27, 2024 and sell it today you would earn a total of 495.00 from holding Special Opportunities Closed or generate 49.6% 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. Special Opportunities Closed
Performance |
| Timeline |
| Eagle Point Credit |
| Special Opportunities |
Eagle Point and Special Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Special Opportunities
The main advantage of trading using opposite Eagle Point and Special Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Special Opportunities 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 Special Opportunities will offset losses from the drop in Special Opportunities' 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 |
| Special Opportunities vs. Ares Dynamic Credit | Special Opportunities vs. Lazard Global Total | Special Opportunities vs. Principal Real Estate | Special Opportunities vs. Tortoise Power And |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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