Correlation Between T Rowe and Eagle Point

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Can any of the company-specific risk be diversified away by investing in both T Rowe 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 T Rowe and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and Eagle Point Credit, you can compare the effects of market volatilities on T Rowe 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 T Rowe with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Eagle Point.

Diversification Opportunities for T Rowe and Eagle Point

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between T Rowe and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price 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 T Rowe 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 T Rowe Price 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 T Rowe i.e., T Rowe and Eagle Point go up and down completely randomly.

Pair Corralation between T Rowe and Eagle Point

If you would invest (100.00)  in Eagle Point Credit on February 16, 2022 and sell it today you would earn a total of  100.00  from holding Eagle Point Credit or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

T Rowe Price  vs.  Eagle Point Credit

 Performance (%) 
      Timeline 
T Rowe Price 
T Rowe Performance
0 of 100
Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

T Rowe Price Channel

Eagle Point Credit 
Eagle Performance
0 of 100
Over the last 90 days Eagle Point Credit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Eagle Point is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

T Rowe and Eagle Point Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with T Rowe and Eagle Point

The main advantage of trading using opposite T Rowe and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe 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 T Rowe Price 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.

Eagle Point Credit

Pair trading matchups for Eagle Point

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Mosaic vs. Eagle Point
Alphabet vs. Eagle Point
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Eagle Point as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Eagle Point's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Eagle Point's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Eagle Point Credit.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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