Correlation Between Scout Small and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Scout Small 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 Scout Small and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and Eagle Small Cap, you can compare the effects of market volatilities on Scout Small 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 Scout Small with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and Eagle Small.
Diversification Opportunities for Scout Small and Eagle Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scout and Eagle is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap 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 Scout 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 Scout Small Cap 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 Scout Small i.e., Scout Small and Eagle Small go up and down completely randomly.
Pair Corralation between Scout Small and Eagle Small
Assuming the 90 days horizon Scout Small Cap is expected to generate 1.22 times more return on investment than Eagle Small. However, Scout Small is 1.22 times more volatile than Eagle Small Cap. It trades about 0.25 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.23 per unit of risk. If you would invest 3,187 in Scout Small Cap on August 28, 2024 and sell it today you would earn a total of 301.00 from holding Scout Small Cap or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout Small Cap vs. Eagle Small Cap
Performance |
| Timeline |
| Scout Small Cap |
| Eagle Small Cap |
Scout Small and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Small and Eagle Small
The main advantage of trading using opposite Scout Small and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small 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.| Scout Small vs. Legg Mason Bw | Scout Small vs. Enhanced Large Pany | Scout Small vs. Goldman Sachs Large | Scout Small vs. Morningstar Unconstrained Allocation |
| Eagle Small vs. Pioneer High Yield | Eagle Small vs. American Century High | Eagle Small vs. Multi Manager High Yield | Eagle Small vs. Pace High Yield |
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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