Correlation Between Usio and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Usio 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 Usio and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usio Inc and Eagle Point Credit, you can compare the effects of market volatilities on Usio 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 Usio with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usio and Eagle Point.
Diversification Opportunities for Usio and Eagle Point
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Usio and Eagle is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc 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 Usio 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 Usio Inc 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 Usio i.e., Usio and Eagle Point go up and down completely randomly.
Pair Corralation between Usio and Eagle Point
Given the investment horizon of 90 days Usio is expected to generate 1.57 times less return on investment than Eagle Point. In addition to that, Usio is 5.79 times more volatile than Eagle Point Credit. It trades about 0.01 of its total potential returns per unit of risk. Eagle Point Credit is currently generating about 0.1 per unit of volatility. If you would invest 2,366 in Eagle Point Credit on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Eagle Point Credit or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usio Inc vs. Eagle Point Credit
Performance |
| Timeline |
| Usio Inc |
| Eagle Point Credit |
Usio and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usio and Eagle Point
The main advantage of trading using opposite Usio and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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.The idea behind Usio Inc and Eagle Point Credit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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