Correlation Between Total Return and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Total Return and Eagle 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 Total Return and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Bond and Eagle Small Cap, you can compare the effects of market volatilities on Total Return and Eagle 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 Total Return with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Eagle Small.
Diversification Opportunities for Total Return and Eagle Small
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Total and Eagle is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Bond and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Total Return 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 Total Return Bond are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Total Return i.e., Total Return and Eagle Small go up and down completely randomly.
Pair Corralation between Total Return and Eagle Small
Assuming the 90 days horizon Total Return is expected to generate 12.19 times less return on investment than Eagle Small. But when comparing it to its historical volatility, Total Return Bond is 4.07 times less risky than Eagle Small. It trades about 0.09 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,023 in Eagle Small Cap on September 5, 2024 and sell it today you would earn a total of 240.00 from holding Eagle Small Cap or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Return Bond vs. Eagle Small Cap
Performance |
| Timeline |
| Total Return Bond |
| Eagle Small Cap |
Total Return and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Eagle Small
The main advantage of trading using opposite Total Return and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return position performs unexpectedly, Eagle 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| Total Return vs. Prudential Real Estate | Total Return vs. Fidelity Real Estate | Total Return vs. Virtus Real Estate | Total Return vs. Goldman Sachs Real |
| Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short | Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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