Correlation Between Eagle Growth and Mid Cap

Can any of the company-specific risk be diversified away by investing in both Eagle Growth and Mid Cap 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 Eagle Growth and Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Growth Income and Mid Cap Strategic, you can compare the effects of market volatilities on Eagle Growth and Mid Cap 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 Eagle Growth with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Growth and Mid Cap.

Diversification Opportunities for Eagle Growth and Mid Cap

0.96

Correlation Coefficient

Eagle Growth  Mid Cap

Almost no diversification

The 3 months correlation between Eagle and Mid is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Growth Income and Mid Cap Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Strategic and Eagle 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 Eagle Growth Income are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Strategic has no effect on the direction of Eagle Growth i.e., Eagle Growth and Mid Cap go up and down completely randomly.

Pair Corralation between Eagle Growth and Mid Cap

Assuming the 90 days horizon Eagle Growth is expected to generate 1.26 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Eagle Growth Income is 1.4 times less risky than Mid Cap. It trades about 0.24 of its potential returns per unit of risk. Mid Cap Strategic is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,986  in Mid Cap Strategic on May 4, 2025 and sell it today you would earn a total of  253.00  from holding Mid Cap Strategic or generate 12.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Eagle Growth Income  vs.  Mid Cap Strategic

Eagle Growth Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Growth Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Eagle Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Mid Cap Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Strategic are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mid Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Eagle Growth and Mid Cap

The main advantage of trading using opposite Eagle Growth and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Growth position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.

The idea behind Eagle Growth Income and Mid Cap Strategic 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.