Correlation Between Affiliated Managers and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers 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 Affiliated Managers and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and Eagle Point Credit, you can compare the effects of market volatilities on Affiliated Managers 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 Affiliated Managers with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Eagle Point.
Diversification Opportunities for Affiliated Managers and Eagle Point
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Affiliated and Eagle is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group 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 Affiliated Managers 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 Affiliated Managers Group 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 Affiliated Managers i.e., Affiliated Managers and Eagle Point go up and down completely randomly.
Pair Corralation between Affiliated Managers and Eagle Point
Considering the 90-day investment horizon Affiliated Managers Group is expected to generate 1.82 times more return on investment than Eagle Point. However, Affiliated Managers is 1.82 times more volatile than Eagle Point Credit. It trades about 0.23 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.13 per unit of risk. If you would invest 2,257 in Affiliated Managers Group on July 15, 2024 and sell it today you would earn a total of 237.00 from holding Affiliated Managers Group or generate 10.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Affiliated Managers Group vs. Eagle Point Credit
Performance |
Timeline |
Affiliated Managers |
Eagle Point Credit |
Affiliated Managers and Eagle Point Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affiliated Managers and Eagle Point
The main advantage of trading using opposite Affiliated Managers and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers 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.Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. Southern Co | Affiliated Managers vs. Duke Energy Corp | Affiliated Managers vs. Southern Co |
Eagle Point vs. CMS Energy Corp | Eagle Point vs. Southern Co | Eagle Point vs. Duke Energy Corp | Eagle Point vs. Southern Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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