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

-0.78

Correlation Coefficient

Usio  Eagle Point

Pay attention - limited upside

The 3 months correlation between Usio and Eagle is -0.78. 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 Inc is expected to under-perform the Eagle Point. In addition to that, Usio is 6.61 times more volatile than Eagle Point Credit. It trades about -0.13 of its total potential returns per unit of risk. Eagle Point Credit is currently generating about 0.14 per unit of volatility. If you would invest  2,454  in Eagle Point Credit on July 15, 2024 and sell it today you would earn a total of  25.00  from holding Eagle Point Credit or generate 1.02% return on investment over 90 days.

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

Usio Inc  vs.  Eagle Point Credit

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Eagle Point Credit

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.