Correlation Between Scout Core and Eagle Mid
Can any of the company-specific risk be diversified away by investing in both Scout Core and Eagle Mid 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 Scout Core and Eagle Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout E Bond and Eagle Mid Cap, you can compare the effects of market volatilities on Scout Core and Eagle Mid 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 Scout Core with a short position of Eagle Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Core and Eagle Mid.
Diversification Opportunities for Scout Core and Eagle Mid
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scout and Eagle is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Scout E Bond and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid Cap and Scout Core 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 Scout E Bond are associated (or correlated) with Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Scout Core i.e., Scout Core and Eagle Mid go up and down completely randomly.
Pair Corralation between Scout Core and Eagle Mid
Assuming the 90 days horizon Scout Core is expected to generate 5.33 times less return on investment than Eagle Mid. But when comparing it to its historical volatility, Scout E Bond is 2.61 times less risky than Eagle Mid. It trades about 0.02 of its potential returns per unit of risk. Eagle Mid Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,999 in Eagle Mid Cap on August 24, 2024 and sell it today you would earn a total of 1,264 from holding Eagle Mid Cap or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout E Bond vs. Eagle Mid Cap
Performance |
| Timeline |
| Scout E Bond |
| Eagle Mid Cap |
Scout Core and Eagle Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Core and Eagle Mid
The main advantage of trading using opposite Scout Core and Eagle Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Core position performs unexpectedly, Eagle Mid 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 Mid will offset losses from the drop in Eagle Mid's long position.| Scout Core vs. Columbia Small Cap | Scout Core vs. Ultramid Cap Profund Ultramid Cap | Scout Core vs. Hennessy Nerstone Mid | Scout Core vs. Amg River Road |
| Eagle Mid vs. Eagle Small Cap | Eagle Mid vs. Eagle Growth Income | Eagle Mid vs. Eagle Capital Appreciation | Eagle Mid vs. Victory Sycamore Established |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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