Correlation Between Eagle Point and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Eagle Point and OFS Credit 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 OFS Credit 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 OFS Credit, you can compare the effects of market volatilities on Eagle Point and OFS Credit 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 OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and OFS Credit.
Diversification Opportunities for Eagle Point and OFS Credit
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and OFS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Income and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Eagle Point i.e., Eagle Point and OFS Credit go up and down completely randomly.
Pair Corralation between Eagle Point and OFS Credit
Given the investment horizon of 90 days Eagle Point Income is expected to generate 0.77 times more return on investment than OFS Credit. However, Eagle Point Income is 1.3 times less risky than OFS Credit. It trades about 0.07 of its potential returns per unit of risk. OFS Credit is currently generating about 0.04 per unit of risk. If you would invest 2,396 in Eagle Point Income on November 28, 2024 and sell it today you would earn a total of 14.00 from holding Eagle Point Income or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Income vs. OFS Credit
Performance |
| Timeline |
| Eagle Point Income |
| OFS Credit |
Eagle Point and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and OFS Credit
The main advantage of trading using opposite Eagle Point and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit'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 |
| OFS Credit vs. Oxford Lane Capital | OFS Credit vs. OFS Credit | OFS Credit vs. XOMA Corporation | OFS Credit vs. Oxford Lane Capital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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