Correlation Between Eagle Point and Morningstar Unconstrained
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Morningstar Unconstrained 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 Morningstar Unconstrained 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 Morningstar Unconstrained Allocation, you can compare the effects of market volatilities on Eagle Point and Morningstar Unconstrained 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 Morningstar Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Morningstar Unconstrained.
Diversification Opportunities for Eagle Point and Morningstar Unconstrained
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Morningstar is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Morningstar Unconstrained Allo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Unconstrained 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 Morningstar Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Unconstrained has no effect on the direction of Eagle Point i.e., Eagle Point and Morningstar Unconstrained go up and down completely randomly.
Pair Corralation between Eagle Point and Morningstar Unconstrained
Given the investment horizon of 90 days Eagle Point Credit is expected to generate 1.12 times more return on investment than Morningstar Unconstrained. However, Eagle Point is 1.12 times more volatile than Morningstar Unconstrained Allocation. It trades about 0.06 of its potential returns per unit of risk. Morningstar Unconstrained Allocation is currently generating about -0.03 per unit of risk. If you would invest 2,337 in Eagle Point Credit on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Eagle Point Credit or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. Morningstar Unconstrained Allo
Performance |
| Timeline |
| Eagle Point Credit |
| Morningstar Unconstrained |
Eagle Point and Morningstar Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Morningstar Unconstrained
The main advantage of trading using opposite Eagle Point and Morningstar Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Morningstar Unconstrained 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 Morningstar Unconstrained will offset losses from the drop in Morningstar Unconstrained's long position.| Eagle Point vs. Eagle Point Income | Eagle Point vs. Oxford Lane Capital | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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