Correlation Between American Century and First Eagle
Can any of the company-specific risk be diversified away by investing in both American Century and First Eagle 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 American Century and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Etf and First Eagle Funds, you can compare the effects of market volatilities on American Century and First Eagle 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 American Century with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and First Eagle.
Diversification Opportunities for American Century and First Eagle
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and First is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding American Century Etf and First Eagle Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Funds and American Century 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 American Century Etf are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Funds has no effect on the direction of American Century i.e., American Century and First Eagle go up and down completely randomly.
Pair Corralation between American Century and First Eagle
Assuming the 90 days horizon American Century Etf is expected to generate 1.61 times more return on investment than First Eagle. However, American Century is 1.61 times more volatile than First Eagle Funds. It trades about 0.08 of its potential returns per unit of risk. First Eagle Funds is currently generating about 0.06 per unit of risk. If you would invest 1,378 in American Century Etf on August 31, 2024 and sell it today you would earn a total of 556.00 from holding American Century Etf or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
American Century Etf vs. First Eagle Funds
Performance |
| Timeline |
| American Century Etf |
| First Eagle Funds |
American Century and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and First Eagle
The main advantage of trading using opposite American Century and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| American Century vs. T Rowe Price | American Century vs. Aqr Large Cap | American Century vs. Qs Large Cap | American Century vs. Americafirst Large Cap |
| First Eagle vs. Mid Cap Value Profund | First Eagle vs. Hennessy Nerstone Mid | First Eagle vs. American Century Etf | First Eagle vs. Mutual Of America |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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