Correlation Between Eagle Point and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Advantage Solutions 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 Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Point Income and Advantage Solutions, you can compare the effects of market volatilities on Eagle Point and Advantage Solutions 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 Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Advantage Solutions.
Diversification Opportunities for Eagle Point and Advantage Solutions
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Advantage is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions 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 Income are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Eagle Point i.e., Eagle Point and Advantage Solutions go up and down completely randomly.
Pair Corralation between Eagle Point and Advantage Solutions
Given the investment horizon of 90 days Eagle Point Income is expected to generate 0.02 times more return on investment than Advantage Solutions. However, Eagle Point Income is 51.89 times less risky than Advantage Solutions. It trades about 0.21 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.04 per unit of risk. If you would invest 2,378 in Eagle Point Income on September 12, 2024 and sell it today you would earn a total of 25.20 from holding Eagle Point Income or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Eagle Point Income vs. Advantage Solutions
Performance |
| Timeline |
| Eagle Point Income |
| Advantage Solutions |
Eagle Point and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Advantage Solutions
The main advantage of trading using opposite Eagle Point and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| Eagle Point vs. Advantage Solutions | Eagle Point vs. Atlas Corp | Eagle Point vs. PureCycle Technologies | Eagle Point vs. WM Technology |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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