Correlation Between Eagle Point and Invesco High
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Invesco High 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 Invesco High 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 Invesco High Income, you can compare the effects of market volatilities on Eagle Point and Invesco High 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 Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Invesco High.
Diversification Opportunities for Eagle Point and Invesco High
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Invesco is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and Invesco High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Income 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 Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Income has no effect on the direction of Eagle Point i.e., Eagle Point and Invesco High go up and down completely randomly.
Pair Corralation between Eagle Point and Invesco High
Given the investment horizon of 90 days Eagle Point is expected to generate 1.12 times less return on investment than Invesco High. In addition to that, Eagle Point is 3.27 times more volatile than Invesco High Income. It trades about 0.08 of its total potential returns per unit of risk. Invesco High Income is currently generating about 0.31 per unit of volatility. If you would invest 749.00 in Invesco High Income on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Invesco High Income or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Income vs. Invesco High Income
Performance |
| Timeline |
| Eagle Point Income |
| Invesco High Income |
Eagle Point and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Invesco High
The main advantage of trading using opposite Eagle Point and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Invesco High 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 Invesco High will offset losses from the drop in Invesco High'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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