Correlation Between Eagle Point and WhiteHorse Finance
Can any of the company-specific risk be diversified away by investing in both Eagle Point and WhiteHorse Finance 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 WhiteHorse Finance 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 WhiteHorse Finance, you can compare the effects of market volatilities on Eagle Point and WhiteHorse Finance 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 WhiteHorse Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and WhiteHorse Finance.
Diversification Opportunities for Eagle Point and WhiteHorse Finance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and WhiteHorse is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and WhiteHorse Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WhiteHorse Finance 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 WhiteHorse Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WhiteHorse Finance has no effect on the direction of Eagle Point i.e., Eagle Point and WhiteHorse Finance go up and down completely randomly.
Pair Corralation between Eagle Point and WhiteHorse Finance
Considering the 90-day investment horizon Eagle Point Credit is expected to generate 0.71 times more return on investment than WhiteHorse Finance. However, Eagle Point Credit is 1.41 times less risky than WhiteHorse Finance. It trades about -0.17 of its potential returns per unit of risk. WhiteHorse Finance is currently generating about -0.39 per unit of risk. If you would invest 942.00 in Eagle Point Credit on August 29, 2024 and sell it today you would lose (33.00) from holding Eagle Point Credit or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. WhiteHorse Finance
Performance |
| Timeline |
| Eagle Point Credit |
| WhiteHorse Finance |
Eagle Point and WhiteHorse Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and WhiteHorse Finance
The main advantage of trading using opposite Eagle Point and WhiteHorse Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, WhiteHorse Finance 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 WhiteHorse Finance will offset losses from the drop in WhiteHorse Finance'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 |
| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill Investment |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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