Correlation Between Eagle Point and MSCI ACWI
Can any of the company-specific risk be diversified away by investing in both Eagle Point and MSCI ACWI 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 MSCI ACWI 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 MSCI ACWI exAUCONSUMER, you can compare the effects of market volatilities on Eagle Point and MSCI ACWI 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 MSCI ACWI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and MSCI ACWI.
Diversification Opportunities for Eagle Point and MSCI ACWI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagle and MSCI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and MSCI ACWI exAUCONSUMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI ACWI exAUCONSUMER 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 MSCI ACWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI ACWI exAUCONSUMER has no effect on the direction of Eagle Point i.e., Eagle Point and MSCI ACWI go up and down completely randomly.
Pair Corralation between Eagle Point and MSCI ACWI
Given the investment horizon of 90 days Eagle Point Credit is expected to generate 1.97 times more return on investment than MSCI ACWI. However, Eagle Point is 1.97 times more volatile than MSCI ACWI exAUCONSUMER. It trades about 0.12 of its potential returns per unit of risk. MSCI ACWI exAUCONSUMER is currently generating about 0.17 per unit of risk. If you would invest 2,355 in Eagle Point Credit on August 29, 2024 and sell it today you would earn a total of 136.00 from holding Eagle Point Credit or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. MSCI ACWI exAUCONSUMER
Performance |
| Timeline |
| Eagle Point Credit |
| MSCI ACWI exAUCONSUMER |
Eagle Point and MSCI ACWI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and MSCI ACWI
The main advantage of trading using opposite Eagle Point and MSCI ACWI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, MSCI ACWI 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 MSCI ACWI will offset losses from the drop in MSCI ACWI's long position.The idea behind Eagle Point Credit and MSCI ACWI exAUCONSUMER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. TRINL |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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