Correlation Between First Eagle and Credit Enhanced
Can any of the company-specific risk be diversified away by investing in both First Eagle and Credit Enhanced 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 First Eagle and Credit Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Alternative and Credit Enhanced Corts, you can compare the effects of market volatilities on First Eagle and Credit Enhanced 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 First Eagle with a short position of Credit Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Credit Enhanced.
Diversification Opportunities for First Eagle and Credit Enhanced
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Credit is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Alternative and Credit Enhanced Corts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Enhanced Corts and First Eagle 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 First Eagle Alternative are associated (or correlated) with Credit Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Enhanced Corts has no effect on the direction of First Eagle i.e., First Eagle and Credit Enhanced go up and down completely randomly.
Pair Corralation between First Eagle and Credit Enhanced
Given the investment horizon of 90 days First Eagle Alternative is expected to generate 0.58 times more return on investment than Credit Enhanced. However, First Eagle Alternative is 1.73 times less risky than Credit Enhanced. It trades about 0.07 of its potential returns per unit of risk. Credit Enhanced Corts is currently generating about 0.01 per unit of risk. If you would invest 2,175 in First Eagle Alternative on September 2, 2024 and sell it today you would earn a total of 285.00 from holding First Eagle Alternative or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.31% |
| Values | Daily Returns |
First Eagle Alternative vs. Credit Enhanced Corts
Performance |
| Timeline |
| First Eagle Alternative |
| Credit Enhanced Corts |
First Eagle and Credit Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Credit Enhanced
The main advantage of trading using opposite First Eagle and Credit Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Credit Enhanced 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 Credit Enhanced will offset losses from the drop in Credit Enhanced's long position.| First Eagle vs. Gladstone Investment | First Eagle vs. Customers Bancorp | First Eagle vs. Ready Capital | First Eagle vs. Great Elm Capital |
| Credit Enhanced vs. Structured Products Corp | Credit Enhanced vs. Strats Trust Cellular | Credit Enhanced vs. Goldman Sachs Capital | Credit Enhanced vs. STRATS SM Trust |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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