Correlation Between First Eagle and California Bond
Can any of the company-specific risk be diversified away by investing in both First Eagle and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on First Eagle and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and California Bond.
Diversification Opportunities for First Eagle and California Bond
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and California is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of First Eagle i.e., First Eagle and California Bond go up and down completely randomly.
Pair Corralation between First Eagle and California Bond
Assuming the 90 days horizon First Eagle Global is expected to generate 1.68 times more return on investment than California Bond. However, First Eagle is 1.68 times more volatile than California Bond Fund. It trades about 0.07 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 1,199 in First Eagle Global on September 4, 2024 and sell it today you would earn a total of 189.00 from holding First Eagle Global or generate 15.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Global vs. California Bond Fund
Performance |
| Timeline |
| First Eagle Global |
| California Bond |
First Eagle and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and California Bond
The main advantage of trading using opposite First Eagle and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| First Eagle vs. Qs Moderate Growth | First Eagle vs. Goldman Sachs Growth | First Eagle vs. Chase Growth Fund | First Eagle vs. Ftfa Franklin Templeton Growth |
| California Bond vs. Goldman Sachs Growth | California Bond vs. Smallcap Growth Fund | California Bond vs. L Abbett Growth | California Bond vs. Small Pany Growth |
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 CEOs Directory module to screen CEOs from public companies around the world.
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