Correlation Between First Trust and Eagle Point
Can any of the company-specific risk be diversified away by investing in both First Trust and Eagle Point 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 First Trust and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Energy and Eagle Point Income, you can compare the effects of market volatilities on First Trust and Eagle Point 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 First Trust with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Eagle Point.
Diversification Opportunities for First Trust and Eagle Point
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Energy and Eagle Point Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Income and First Trust 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 First Trust Energy are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Income has no effect on the direction of First Trust i.e., First Trust and Eagle Point go up and down completely randomly.
Pair Corralation between First Trust and Eagle Point
Considering the 90-day investment horizon First Trust Energy is expected to generate 3.99 times more return on investment than Eagle Point. However, First Trust is 3.99 times more volatile than Eagle Point Income. It trades about 0.25 of its potential returns per unit of risk. Eagle Point Income is currently generating about 0.07 per unit of risk. If you would invest 1,261 in First Trust Energy on September 1, 2024 and sell it today you would earn a total of 148.00 from holding First Trust Energy or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 8.33% |
| Values | Daily Returns |
First Trust Energy vs. Eagle Point Income
Performance |
| Timeline |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eagle Point Income |
First Trust and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Eagle Point
The main advantage of trading using opposite First Trust and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.| First Trust vs. Eagle Point Income | First Trust vs. European Equity Closed | First Trust vs. John Hancock Income | First Trust vs. First Trust Intermediate |
| Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Oxford Lane Capital | Eagle Point vs. OFS Credit |
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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