Correlation Between Europac Gold and First Eagle
Can any of the company-specific risk be diversified away by investing in both Europac Gold 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 Europac Gold and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and First Eagle Gold, you can compare the effects of market volatilities on Europac Gold 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 Europac Gold with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and First Eagle.
Diversification Opportunities for Europac Gold and First Eagle
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Europac and First is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund 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 Europac Gold 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 Europac Gold Fund 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 Europac Gold i.e., Europac Gold and First Eagle go up and down completely randomly.
Pair Corralation between Europac Gold and First Eagle
Assuming the 90 days horizon Europac Gold Fund is expected to generate 1.5 times more return on investment than First Eagle. However, Europac Gold is 1.5 times more volatile than First Eagle Gold. It trades about 0.03 of its potential returns per unit of risk. First Eagle Gold is currently generating about -0.03 per unit of risk. If you would invest 994.00 in Europac Gold Fund on August 31, 2024 and sell it today you would earn a total of 119.00 from holding Europac Gold Fund or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Europac Gold Fund vs. First Eagle Gold
Performance |
| Timeline |
| Europac Gold |
| First Eagle Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Europac Gold and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and First Eagle
The main advantage of trading using opposite Europac Gold and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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.| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
| First Eagle vs. Aqr Risk Balanced Modities | First Eagle vs. California High Yield Municipal | First Eagle vs. Needham Aggressive Growth | First Eagle vs. Legg Mason Partners |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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