Correlation Between California High-yield and First Eagle
Can any of the company-specific risk be diversified away by investing in both California High-yield 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 California High-yield and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and First Eagle Global, you can compare the effects of market volatilities on California High-yield 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 California High-yield with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and First Eagle.
Diversification Opportunities for California High-yield and First Eagle
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between California and First is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global and California High-yield 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 California High Yield Municipal 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 Global has no effect on the direction of California High-yield i.e., California High-yield and First Eagle go up and down completely randomly.
Pair Corralation between California High-yield and First Eagle
Assuming the 90 days horizon California High Yield Municipal is expected to generate 0.76 times more return on investment than First Eagle. However, California High Yield Municipal is 1.31 times less risky than First Eagle. It trades about 0.07 of its potential returns per unit of risk. First Eagle Global is currently generating about 0.01 per unit of risk. If you would invest 978.00 in California High Yield Municipal on August 28, 2024 and sell it today you would earn a total of 12.00 from holding California High Yield Municipal or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. First Eagle Global
Performance |
| Timeline |
| California High Yield |
| First Eagle Global |
California High-yield and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and First Eagle
The main advantage of trading using opposite California High-yield and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield 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.| California High-yield vs. Crafword Dividend Growth | California High-yield vs. Morningstar Growth Etf | California High-yield vs. Ab Centrated Growth | California High-yield vs. Chase Growth Fund |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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