Correlation Between Eagle Small and Value Line
Can any of the company-specific risk be diversified away by investing in both Eagle Small and Value Line 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 Small and Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Small Cap and Value Line Larger, you can compare the effects of market volatilities on Eagle Small and Value Line 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 Small with a short position of Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Small and Value Line.
Diversification Opportunities for Eagle Small and Value Line
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Value is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small Cap and Value Line Larger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Larger and Eagle Small 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 Small Cap are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Larger has no effect on the direction of Eagle Small i.e., Eagle Small and Value Line go up and down completely randomly.
Pair Corralation between Eagle Small and Value Line
Assuming the 90 days horizon Eagle Small Cap is expected to generate 1.01 times more return on investment than Value Line. However, Eagle Small is 1.01 times more volatile than Value Line Larger. It trades about 0.21 of its potential returns per unit of risk. Value Line Larger is currently generating about 0.21 per unit of risk. If you would invest 2,536 in Eagle Small Cap on August 29, 2024 and sell it today you would earn a total of 177.00 from holding Eagle Small Cap or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Small Cap vs. Value Line Larger
Performance |
| Timeline |
| Eagle Small Cap |
| Value Line Larger |
Eagle Small and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Small and Value Line
The main advantage of trading using opposite Eagle Small and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Small position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| Eagle Small vs. Us Government Securities | Eagle Small vs. Blackrock Government Bond | Eagle Small vs. Government Securities Fund | Eagle Small vs. Us Government Plus |
| Value Line vs. Growth Fund Of | Value Line vs. HUMANA INC | Value Line vs. Aquagold International | Value Line vs. Barloworld Ltd ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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