Correlation Between Gabelli Multimedia and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia 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 Gabelli Multimedia and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Multimedia and Eagle Point Credit, you can compare the effects of market volatilities on Gabelli Multimedia 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 Gabelli Multimedia with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and Eagle Point.
Diversification Opportunities for Gabelli Multimedia and Eagle Point
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gabelli and Eagle is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia 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 Gabelli Multimedia 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 The Gabelli Multimedia 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 Gabelli Multimedia i.e., Gabelli Multimedia and Eagle Point go up and down completely randomly.
Pair Corralation between Gabelli Multimedia and Eagle Point
Assuming the 90 days trading horizon Gabelli Multimedia is expected to generate 2.41 times less return on investment than Eagle Point. In addition to that, Gabelli Multimedia is 2.5 times more volatile than Eagle Point Credit. It trades about 0.02 of its total potential returns per unit of risk. Eagle Point Credit is currently generating about 0.12 per unit of volatility. If you would invest 2,271 in Eagle Point Credit on September 26, 2024 and sell it today you would earn a total of 216.00 from holding Eagle Point Credit or generate 9.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 48.19% |
Values | Daily Returns |
The Gabelli Multimedia vs. Eagle Point Credit
Performance |
Timeline |
The Gabelli Multimedia |
Eagle Point Credit |
Gabelli Multimedia and Eagle Point Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gabelli Multimedia and Eagle Point
The main advantage of trading using opposite Gabelli Multimedia and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia 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.Gabelli Multimedia vs. Virtus AllianzGI Convertible | Gabelli Multimedia vs. The Gabelli Equity | Gabelli Multimedia vs. Oxford Lane Capital | Gabelli Multimedia vs. The Gabelli Utility |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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