Correlation Between First Eagle and American Funds
Can any of the company-specific risk be diversified away by investing in both First Eagle and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and American Funds 2030, you can compare the effects of market volatilities on First Eagle and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and American Funds.
Diversification Opportunities for First Eagle and American Funds
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and American is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and American Funds 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2030 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 Gold are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2030 has no effect on the direction of First Eagle i.e., First Eagle and American Funds go up and down completely randomly.
Pair Corralation between First Eagle and American Funds
Assuming the 90 days horizon First Eagle is expected to generate 1.06 times less return on investment than American Funds. In addition to that, First Eagle is 3.13 times more volatile than American Funds 2030. It trades about 0.03 of its total potential returns per unit of risk. American Funds 2030 is currently generating about 0.11 per unit of volatility. If you would invest 1,414 in American Funds 2030 on September 12, 2024 and sell it today you would earn a total of 404.00 from holding American Funds 2030 or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. American Funds 2030
Performance |
| Timeline |
| First Eagle Gold |
| American Funds 2030 |
First Eagle and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and American Funds
The main advantage of trading using opposite First Eagle and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Gold | First Eagle vs. Franklin Gold Precious | First Eagle vs. First Eagle Global |
| American Funds vs. Goldman Sachs Government | American Funds vs. Ridgeworth Seix Government | American Funds vs. Us Government Securities | American Funds vs. Prudential Government Income |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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