Correlation Between Moderate Strategy and Eagle Growth

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

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

Diversification Opportunities for Moderate Strategy and Eagle Growth

0.55

Correlation Coefficient

Moderate Strategy  Eagle Growth

Very weak diversification

The 3 months correlation between Moderate and Eagle is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Strategy Fund and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth Income and Moderate Strategy 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 Moderate Strategy Fund are associated (or correlated) with Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of Moderate Strategy i.e., Moderate Strategy and Eagle Growth go up and down completely randomly.

Pair Corralation between Moderate Strategy and Eagle Growth

Assuming the 90 days horizon Moderate Strategy is expected to generate 1.54 times less return on investment than Eagle Growth. But when comparing it to its historical volatility, Moderate Strategy Fund is 1.9 times less risky than Eagle Growth. It trades about 0.23 of its potential returns per unit of risk. Eagle Growth Income is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,910  in Eagle Growth Income on May 17, 2025 and sell it today you would earn a total of  138.00  from holding Eagle Growth Income or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Moderate Strategy Fund  vs.  Eagle Growth Income

Moderate Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderate Strategy Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Moderate Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Growth Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Growth Income are ranked lower than 14 (%) 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.

Pair Trading with Moderate Strategy and Eagle Growth

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

The idea behind Moderate Strategy Fund and Eagle Growth Income 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.

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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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.