Correlation Between Eagle Mid and Ivy Mid

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

Diversification Opportunities for Eagle Mid and Ivy Mid

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Eagle and Ivy is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mid Cap and Ivy Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Mid Cap and Eagle Mid 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 Eagle Mid Cap are associated (or correlated) with Ivy Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Mid Cap has no effect on the direction of Eagle Mid i.e., Eagle Mid and Ivy Mid go up and down completely randomly.

Pair Corralation between Eagle Mid and Ivy Mid

Assuming the 90 days horizon Eagle Mid Cap is expected to generate 0.98 times more return on investment than Ivy Mid. However, Eagle Mid Cap is 1.02 times less risky than Ivy Mid. It trades about -0.04 of its potential returns per unit of risk. Ivy Mid Cap is currently generating about -0.06 per unit of risk. If you would invest  6,735  in Eagle Mid Cap on October 8, 2025 and sell it today you would lose (183.00) from holding Eagle Mid Cap or give up 2.72% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Eagle Mid Cap  vs.  Ivy Mid Cap

 Performance 
       Timeline  
Eagle Mid Cap 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Eagle Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eagle Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ivy Mid Cap 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Ivy Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ivy Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Mid and Ivy Mid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eagle Mid and Ivy Mid

The main advantage of trading using opposite Eagle Mid and Ivy Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mid position performs unexpectedly, Ivy Mid 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 Ivy Mid will offset losses from the drop in Ivy Mid's long position.
The idea behind Eagle Mid Cap and Ivy Mid 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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