Correlation Between Eagle Small and Eagle Growth
Can any of the company-specific risk be diversified away by investing in both Eagle Small and Eagle Growth 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 Eagle Growth 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 Eagle Growth Income, you can compare the effects of market volatilities on Eagle Small and Eagle Growth 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 Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Small and Eagle Growth.
Diversification Opportunities for Eagle Small and Eagle Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Eagle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small Cap and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth Income 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 Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of Eagle Small i.e., Eagle Small and Eagle Growth go up and down completely randomly.
Pair Corralation between Eagle Small and Eagle Growth
Assuming the 90 days horizon Eagle Small Cap is expected to generate 1.9 times more return on investment than Eagle Growth. However, Eagle Small is 1.9 times more volatile than Eagle Growth Income. It trades about 0.22 of its potential returns per unit of risk. Eagle Growth Income is currently generating about 0.16 per unit of risk. If you would invest 325.00 in Eagle Small Cap on August 28, 2024 and sell it today you would earn a total of 23.00 from holding Eagle Small Cap or generate 7.08% 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. Eagle Growth Income
Performance |
| Timeline |
| Eagle Small Cap |
| Eagle Growth Income |
Eagle Small and Eagle Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Small and Eagle Growth
The main advantage of trading using opposite Eagle Small and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Small position performs unexpectedly, Eagle Growth 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 Growth will offset losses from the drop in Eagle Growth's long position.| Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short | Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short |
| Eagle Growth vs. Eagle Capital Appreciation | Eagle Growth vs. Eagle Mid Cap | Eagle Growth vs. Eagle Small Cap | Eagle Growth vs. Prudential Jennison Equity |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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