Correlation Between Omni Small-cap and First Eagle
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap 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 Omni Small-cap and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and First Eagle Gold, you can compare the effects of market volatilities on Omni Small-cap 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 Omni Small-cap with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and First Eagle.
Diversification Opportunities for Omni Small-cap and First Eagle
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omni and First is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Omni Small-cap 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 Omni Small Cap Value 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 Gold has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and First Eagle go up and down completely randomly.
Pair Corralation between Omni Small-cap and First Eagle
Assuming the 90 days horizon Omni Small-cap is expected to generate 1.6 times less return on investment than First Eagle. In addition to that, Omni Small-cap is 1.08 times more volatile than First Eagle Gold. It trades about 0.02 of its total potential returns per unit of risk. First Eagle Gold is currently generating about 0.04 per unit of volatility. If you would invest 2,329 in First Eagle Gold on September 4, 2024 and sell it today you would earn a total of 604.00 from holding First Eagle Gold or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. First Eagle Gold
Performance |
| Timeline |
| Omni Small Cap |
| First Eagle Gold |
Omni Small-cap and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and First Eagle
The main advantage of trading using opposite Omni Small-cap and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap 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.| Omni Small-cap vs. Morningstar Global Income | Omni Small-cap vs. Franklin Mutual Global | Omni Small-cap vs. Ab Global Risk | Omni Small-cap vs. Scharf Global Opportunity |
| First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Global | First Eagle vs. Oppenheimer Gold Special | First Eagle vs. Aquagold International |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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