Correlation Between First Eagle and Gamco Global
Can any of the company-specific risk be diversified away by investing in both First Eagle and Gamco Global 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 Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Global and Gamco Global Gold, you can compare the effects of market volatilities on First Eagle and Gamco Global 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 Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Gamco Global.
Diversification Opportunities for First Eagle and Gamco Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Gamco is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Gamco Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Gold 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 Global are associated (or correlated) with Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Gold has no effect on the direction of First Eagle i.e., First Eagle and Gamco Global go up and down completely randomly.
Pair Corralation between First Eagle and Gamco Global
Assuming the 90 days horizon First Eagle Global is expected to under-perform the Gamco Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Global is 2.22 times less risky than Gamco Global. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Gamco Global Gold is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Gamco Global Gold on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Gamco Global Gold or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Global vs. Gamco Global Gold
Performance |
| Timeline |
| First Eagle Global |
| Gamco Global Gold |
First Eagle and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Gamco Global
The main advantage of trading using opposite First Eagle and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Fund | First Eagle vs. First Eagle Fund |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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