Correlation Between Fulcrum Diversified and First Eagle
Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified 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 Fulcrum Diversified and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Diversified Absolute and First Eagle Small, you can compare the effects of market volatilities on Fulcrum Diversified 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 Fulcrum Diversified with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and First Eagle.
Diversification Opportunities for Fulcrum Diversified and First Eagle
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fulcrum and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and First Eagle Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Small and Fulcrum Diversified 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 Fulcrum Diversified Absolute 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 Small has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and First Eagle go up and down completely randomly.
Pair Corralation between Fulcrum Diversified and First Eagle
Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to under-perform the First Eagle. In addition to that, Fulcrum Diversified is 1.19 times more volatile than First Eagle Small. It trades about -0.13 of its total potential returns per unit of risk. First Eagle Small is currently generating about 0.05 per unit of volatility. If you would invest 1,099 in First Eagle Small on September 13, 2024 and sell it today you would earn a total of 9.00 from holding First Eagle Small or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulcrum Diversified Absolute vs. First Eagle Small
Performance |
| Timeline |
| Fulcrum Diversified |
| First Eagle Small |
Fulcrum Diversified and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulcrum Diversified and First Eagle
The main advantage of trading using opposite Fulcrum Diversified and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Diversified 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.| Fulcrum Diversified vs. Fidelity Advisor Gold | Fulcrum Diversified vs. Invesco Gold Special | Fulcrum Diversified vs. Precious Metals And | Fulcrum Diversified vs. James Balanced Golden |
| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |