Correlation Between Income Fund and First Eagle
Can any of the company-specific risk be diversified away by investing in both Income Fund 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 Income Fund and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and First Eagle Value, you can compare the effects of market volatilities on Income Fund 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 Income Fund with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and First Eagle.
Diversification Opportunities for Income Fund and First Eagle
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Income and First is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and First Eagle Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Value and Income Fund 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 Income Fund Of 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 Value has no effect on the direction of Income Fund i.e., Income Fund and First Eagle go up and down completely randomly.
Pair Corralation between Income Fund and First Eagle
Assuming the 90 days horizon Income Fund Of is expected to generate 0.23 times more return on investment than First Eagle. However, Income Fund Of is 4.43 times less risky than First Eagle. It trades about 0.04 of its potential returns per unit of risk. First Eagle Value is currently generating about -0.19 per unit of risk. If you would invest 2,577 in Income Fund Of on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Income Fund Of or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. First Eagle Value
Performance |
| Timeline |
| Income Fund |
| First Eagle Value |
Income Fund and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and First Eagle
The main advantage of trading using opposite Income Fund and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund 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.| Income Fund vs. Income Fund Of | Income Fund vs. New World Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Mutual Fund |
| First Eagle vs. Alpine Ultra Short | First Eagle vs. Lord Abbett Short | First Eagle vs. Virtus Multi Sector Short | First Eagle vs. Dreyfus Short Intermediate |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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