Correlation Between Eagle Point and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Customers Bancorp 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 Customers Bancorp 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 Customers Bancorp, you can compare the effects of market volatilities on Eagle Point and Customers Bancorp 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 Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Customers Bancorp.
Diversification Opportunities for Eagle Point and Customers Bancorp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eagle and Customers is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp 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 Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Eagle Point i.e., Eagle Point and Customers Bancorp go up and down completely randomly.
Pair Corralation between Eagle Point and Customers Bancorp
Given the investment horizon of 90 days Eagle Point Credit is expected to generate 0.25 times more return on investment than Customers Bancorp. However, Eagle Point Credit is 4.03 times less risky than Customers Bancorp. It trades about 0.02 of its potential returns per unit of risk. Customers Bancorp is currently generating about -0.08 per unit of risk. If you would invest 2,462 in Eagle Point Credit on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Eagle Point Credit or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. Customers Bancorp
Performance |
| Timeline |
| Eagle Point Credit |
| Customers Bancorp |
Eagle Point and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Customers Bancorp
The main advantage of trading using opposite Eagle Point and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Customers Bancorp 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| Eagle Point vs. Oxford Lane Capital | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit |
| Customers Bancorp vs. CMS Energy Corp | Customers Bancorp vs. CMS Energy Corp | Customers Bancorp vs. American Financial Group | Customers Bancorp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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