Correlation Between Eagle Point and Focus Financial
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Focus Financial 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 Focus Financial 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 Focus Financial Partners, you can compare the effects of market volatilities on Eagle Point and Focus Financial 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 Focus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Focus Financial.
Diversification Opportunities for Eagle Point and Focus Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Focus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and Focus Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Financial Partners 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 Focus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Financial Partners has no effect on the direction of Eagle Point i.e., Eagle Point and Focus Financial go up and down completely randomly.
Pair Corralation between Eagle Point and Focus Financial
Given the investment horizon of 90 days Eagle Point Income is expected to generate 3.38 times more return on investment than Focus Financial. However, Eagle Point is 3.38 times more volatile than Focus Financial Partners. It trades about 0.07 of its potential returns per unit of risk. Focus Financial Partners is currently generating about -0.06 per unit of risk. If you would invest 2,176 in Eagle Point Income on August 31, 2024 and sell it today you would earn a total of 228.00 from holding Eagle Point Income or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Eagle Point Income vs. Focus Financial Partners
Performance |
| Timeline |
| Eagle Point Income |
| Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eagle Point and Focus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Focus Financial
The main advantage of trading using opposite Eagle Point and Focus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Focus Financial 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 Focus Financial will offset losses from the drop in Focus Financial'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 |
| Focus Financial vs. Federated Premier Municipal | Focus Financial vs. Blackrock Muniyield | Focus Financial vs. Diamond Hill Investment | Focus Financial vs. NXG NextGen Infrastructure |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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