Correlation Between Eagle Growth and Scout Small
Can any of the company-specific risk be diversified away by investing in both Eagle Growth and Scout Small 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 Growth and Scout Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Growth Income and Scout Small Cap, you can compare the effects of market volatilities on Eagle Growth and Scout Small 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 Growth with a short position of Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Growth and Scout Small.
Diversification Opportunities for Eagle Growth and Scout Small
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Scout is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Growth Income and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap and Eagle Growth 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 Growth Income are associated (or correlated) with Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Eagle Growth i.e., Eagle Growth and Scout Small go up and down completely randomly.
Pair Corralation between Eagle Growth and Scout Small
Assuming the 90 days horizon Eagle Growth Income is expected to generate 0.48 times more return on investment than Scout Small. However, Eagle Growth Income is 2.1 times less risky than Scout Small. It trades about 0.1 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,743 in Eagle Growth Income on November 9, 2024 and sell it today you would earn a total of 365.00 from holding Eagle Growth Income or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Growth Income vs. Scout Small Cap
Performance |
| Timeline |
| Eagle Growth Income |
| Scout Small Cap |
Eagle Growth and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Growth and Scout Small
The main advantage of trading using opposite Eagle Growth and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Growth position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.| Eagle Growth vs. Lebenthal Lisanti Small | Eagle Growth vs. Rational Defensive Growth | Eagle Growth vs. Needham Aggressive Growth | Eagle Growth vs. Growth Fund Of |
| Scout Small vs. American Funds Retirement | Scout Small vs. Putnman Retirement Ready | Scout Small vs. Lifestyle Ii Moderate | Scout Small vs. Blackrock Moderate Prepared |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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