Correlation Between Eagle Small and Scout Small
Can any of the company-specific risk be diversified away by investing in both Eagle Small 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 Small 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 Small Cap and Scout Small Cap, you can compare the effects of market volatilities on Eagle Small 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 Small with a short position of Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Small and Scout Small.
Diversification Opportunities for Eagle Small and Scout Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Scout is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small Cap 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 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 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 Small i.e., Eagle Small and Scout Small go up and down completely randomly.
Pair Corralation between Eagle Small and Scout Small
Assuming the 90 days horizon Eagle Small Cap is expected to under-perform the Scout Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eagle Small Cap is 1.01 times less risky than Scout Small. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Scout Small Cap is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,553 in Scout Small Cap on January 12, 2025 and sell it today you would lose (110.00) from holding Scout Small Cap or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eagle Small Cap vs. Scout Small Cap
Performance |
| Timeline |
| Eagle Small Cap |
| Scout Small Cap |
Eagle Small and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Small and Scout Small
The main advantage of trading using opposite Eagle Small and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Small 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 Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short | Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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