Correlation Between Eagle Point and First Trust
Can any of the company-specific risk be diversified away by investing in both Eagle Point and First Trust 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 First Trust 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 First Trust Energy, you can compare the effects of market volatilities on Eagle Point and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and First Trust.
Diversification Opportunities for Eagle Point and First Trust
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and First Trust Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Energy 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Energy has no effect on the direction of Eagle Point i.e., Eagle Point and First Trust go up and down completely randomly.
Pair Corralation between Eagle Point and First Trust
If you would invest 2,375 in Eagle Point Income on August 27, 2024 and sell it today you would earn a total of 6.00 from holding Eagle Point Income or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Eagle Point Income vs. First Trust Energy
Performance |
| Timeline |
| Eagle Point Income |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eagle Point and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and First Trust
The main advantage of trading using opposite Eagle Point and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Oxford Lane Capital | Eagle Point vs. OFS Credit |
| First Trust vs. Eagle Point Income | First Trust vs. European Equity Closed | First Trust vs. John Hancock Income | First Trust vs. First Trust Intermediate |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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