Correlation Between Sachem Capital and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Sachem 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 Sachem 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 Sachem Capital Corp and Eagle Point Credit, you can compare the effects of market volatilities on Sachem 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 Sachem Capital with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Eagle Point.
Diversification Opportunities for Sachem Capital and Eagle Point
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sachem and Eagle is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp 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 Sachem 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 Sachem Capital Corp 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 Sachem Capital i.e., Sachem Capital and Eagle Point go up and down completely randomly.
Pair Corralation between Sachem Capital and Eagle Point
Given the investment horizon of 90 days Sachem Capital is expected to generate 6.05 times less return on investment than Eagle Point. But when comparing it to its historical volatility, Sachem Capital Corp is 2.98 times less risky than Eagle Point. It trades about 0.02 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,480 in Eagle Point Credit on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Eagle Point Credit or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sachem Capital Corp vs. Eagle Point Credit
Performance |
| Timeline |
| Sachem Capital Corp |
| Eagle Point Credit |
Sachem Capital and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Eagle Point
The main advantage of trading using opposite Sachem Capital and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem 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.| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |