Correlation Between Ready Capital and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Ready Capital and Eagle Point 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 Ready Capital and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital and Eagle Point Credit, you can compare the effects of market volatilities on Ready Capital and Eagle Point 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 Ready Capital with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and Eagle Point.
Diversification Opportunities for Ready Capital and Eagle Point
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ready and Eagle is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit and Ready Capital 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 Ready Capital are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Ready Capital i.e., Ready Capital and Eagle Point go up and down completely randomly.
Pair Corralation between Ready Capital and Eagle Point
Considering the 90-day investment horizon Ready Capital is expected to generate 3.77 times less return on investment than Eagle Point. But when comparing it to its historical volatility, Ready Capital is 3.25 times less risky than Eagle Point. It trades about 0.04 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,104 in Eagle Point Credit on August 28, 2024 and sell it today you would earn a total of 382.00 from holding Eagle Point Credit or generate 18.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Ready Capital vs. Eagle Point Credit
Performance |
| Timeline |
| Ready Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eagle Point Credit |
Ready Capital and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and Eagle Point
The main advantage of trading using opposite Ready Capital and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital position performs unexpectedly, Eagle Point 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 Point will offset losses from the drop in Eagle Point's long position.| Ready Capital vs. Ready Capital | Ready Capital vs. Eagle Point Credit | Ready Capital vs. QVC 6375 percent |
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.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |