Correlation Between Total Return and Eagle Small

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

Diversification Opportunities for Total Return and Eagle Small

TotalEagleDiversified AwayTotalEagleDiversified Away100%
-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Total and Eagle is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Bond and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Total Return 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 Total Return Bond are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Total Return i.e., Total Return and Eagle Small go up and down completely randomly.

Pair Corralation between Total Return and Eagle Small

Assuming the 90 days horizon Total Return Bond is expected to under-perform the Eagle Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Total Return Bond is 3.53 times less risky than Eagle Small. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Eagle Small Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,951  in Eagle Small Cap on September 16, 2024 and sell it today you would earn a total of  220.00  from holding Eagle Small Cap or generate 7.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Total Return Bond  vs.  Eagle Small Cap

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0510
JavaScript chart by amCharts 3.21.15MBFIX HSIIX
       Timeline  
Total Return Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Total Return Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Total Return is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1111.0511.111.1511.211.2511.3
Eagle Small Cap 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eagle Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3030.53131.53232.533

Total Return and Eagle Small Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.46-0.26-0.0928-0.0486-0.0066310.03110.070.140.340.54 1234
JavaScript chart by amCharts 3.21.15MBFIX HSIIX
       Returns  

Pair Trading with Total Return and Eagle Small

The main advantage of trading using opposite Total Return and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return position performs unexpectedly, Eagle Small 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 Small will offset losses from the drop in Eagle Small's long position.
The idea behind Total Return Bond and Eagle Small Cap 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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