Correlation Between Emerging Growth and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Emerging Growth 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 Emerging Growth and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Growth Fund and Eagle Small Cap, you can compare the effects of market volatilities on Emerging Growth 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 Emerging Growth with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Growth and Eagle Small.
Diversification Opportunities for Emerging Growth and Eagle Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerging and Eagle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Growth Fund 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 Emerging Growth 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 Emerging Growth Fund 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 Emerging Growth i.e., Emerging Growth and Eagle Small go up and down completely randomly.
Pair Corralation between Emerging Growth and Eagle Small
Assuming the 90 days horizon Emerging Growth Fund is expected to generate 1.06 times more return on investment than Eagle Small. However, Emerging Growth is 1.06 times more volatile than Eagle Small Cap. It trades about 0.05 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,042 in Emerging Growth Fund on September 12, 2024 and sell it today you would earn a total of 335.00 from holding Emerging Growth Fund or generate 32.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Growth Fund vs. Eagle Small Cap
Performance |
| Timeline |
| Emerging Growth |
| Eagle Small Cap |
Emerging Growth and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Growth and Eagle Small
The main advantage of trading using opposite Emerging Growth and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Growth 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.| Emerging Growth vs. Needham Aggressive Growth | Emerging Growth vs. Ultramid Cap Profund Ultramid Cap | Emerging Growth vs. HUMANA INC | Emerging Growth vs. Barloworld Ltd ADR |
| Eagle Small vs. Small Cap Stock | Eagle Small vs. Pgim Jennison Diversified | Eagle Small vs. Jhancock Diversified Macro | Eagle Small vs. Pioneer Diversified High |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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