Correlation Between Flaherty Crumrine and Eagle Capital
Can any of the company-specific risk be diversified away by investing in both Flaherty Crumrine and Eagle Capital 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 Flaherty Crumrine and Eagle Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flaherty Crumrine Preferred and Eagle Capital Growth, you can compare the effects of market volatilities on Flaherty Crumrine and Eagle Capital 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 Flaherty Crumrine with a short position of Eagle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flaherty Crumrine and Eagle Capital.
Diversification Opportunities for Flaherty Crumrine and Eagle Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flaherty and Eagle is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Flaherty Crumrine Preferred and Eagle Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Growth and Flaherty Crumrine 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 Flaherty Crumrine Preferred are associated (or correlated) with Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Growth has no effect on the direction of Flaherty Crumrine i.e., Flaherty Crumrine and Eagle Capital go up and down completely randomly.
Pair Corralation between Flaherty Crumrine and Eagle Capital
Considering the 90-day investment horizon Flaherty Crumrine is expected to generate 1.0 times less return on investment than Eagle Capital. But when comparing it to its historical volatility, Flaherty Crumrine Preferred is 2.13 times less risky than Eagle Capital. It trades about 0.14 of its potential returns per unit of risk. Eagle Capital Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Eagle Capital Growth on September 2, 2024 and sell it today you would earn a total of 104.00 from holding Eagle Capital Growth or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flaherty Crumrine Preferred vs. Eagle Capital Growth
Performance |
| Timeline |
| Flaherty Crumrine |
| Eagle Capital Growth |
Flaherty Crumrine and Eagle Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flaherty Crumrine and Eagle Capital
The main advantage of trading using opposite Flaherty Crumrine and Eagle Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flaherty Crumrine position performs unexpectedly, Eagle Capital 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 Capital will offset losses from the drop in Eagle Capital's long position.| Flaherty Crumrine vs. Flaherty Crumrine Total | Flaherty Crumrine vs. Flaherty Crumrine Preferred | Flaherty Crumrine vs. John Hancock Preferred | Flaherty Crumrine vs. Flaherty and Crumrine |
| Eagle Capital vs. Eaton Vance New | Eagle Capital vs. Pimco New York | Eagle Capital vs. Nuveen Amt Free Municipal | Eagle Capital vs. Western Asset Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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