Correlation Between Fa 529 and Eagle Growth

Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Eagle Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fa 529 Aggressive and Eagle Growth Income, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Eagle Growth.

Diversification Opportunities for Fa 529 and Eagle Growth

0.9

Correlation Coefficient

Fa 529  Eagle Growth

Almost no diversification

The 3 months correlation between FFCGX and Eagle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive 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 Fa 529 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 Fa 529 Aggressive 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 Fa 529 i.e., Fa 529 and Eagle Growth go up and down completely randomly.

Pair Corralation between Fa 529 and Eagle Growth

Assuming the 90 days horizon Fa 529 is expected to generate 1.46 times less return on investment than Eagle Growth. In addition to that, Fa 529 is 1.03 times more volatile than Eagle Growth Income. It trades about 0.12 of its total potential returns per unit of risk. Eagle Growth Income is currently generating about 0.18 per unit of volatility. If you would invest  2,283  in Eagle Growth Income on September 2, 2024 and sell it today you would earn a total of  178.00  from holding Eagle Growth Income or generate 7.8% return on investment over 90 days.

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

Fa 529 Aggressive  vs.  Eagle Growth Income

Fa 529 Aggressive

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fa 529 Aggressive are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fa 529 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

14 of 100

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 forward-looking indicators, Eagle Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fa 529 and Eagle Growth

The main advantage of trading using opposite Fa 529 and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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 Fa 529 Aggressive 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..