Correlation Between European Equity and Eagle Point
Can any of the company-specific risk be diversified away by investing in both European Equity and Eagle Point 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 European Equity and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Equity Closed and Eagle Point Income, you can compare the effects of market volatilities on European Equity and Eagle Point 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 European Equity with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Equity and Eagle Point.
Diversification Opportunities for European Equity and Eagle Point
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Eagle is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed and Eagle Point Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Income and European Equity 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 European Equity Closed are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Income has no effect on the direction of European Equity i.e., European Equity and Eagle Point go up and down completely randomly.
Pair Corralation between European Equity and Eagle Point
Considering the 90-day investment horizon European Equity Closed is expected to generate 2.74 times more return on investment than Eagle Point. However, European Equity is 2.74 times more volatile than Eagle Point Income. It trades about 0.44 of its potential returns per unit of risk. Eagle Point Income is currently generating about 0.21 per unit of risk. If you would invest 814.00 in European Equity Closed on November 3, 2024 and sell it today you would earn a total of 56.00 from holding European Equity Closed or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
European Equity Closed vs. Eagle Point Income
Performance |
| Timeline |
| European Equity Closed |
| Eagle Point Income |
European Equity and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Equity and Eagle Point
The main advantage of trading using opposite European Equity and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.| European Equity vs. XAI Octagon Floating | European Equity vs. MFS Charter Income | European Equity vs. Nuveen New York | European Equity vs. Western Asset High |
| Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Oxford Lane Capital | Eagle Point vs. OFS 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Positions Ratings 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 | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |