Correlation Between First Eagle and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both First Eagle and Sterling Capital 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 Sterling Capital 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 Sterling Capital South, you can compare the effects of market volatilities on First Eagle and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Sterling Capital.
Diversification Opportunities for First Eagle and Sterling Capital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Sterling is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Sterling Capital South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital South 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital South has no effect on the direction of First Eagle i.e., First Eagle and Sterling Capital go up and down completely randomly.
Pair Corralation between First Eagle and Sterling Capital
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Sterling Capital. In addition to that, First Eagle is 18.85 times more volatile than Sterling Capital South. It trades about -0.05 of its total potential returns per unit of risk. Sterling Capital South is currently generating about 0.35 per unit of volatility. If you would invest 1,042 in Sterling Capital South on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Sterling Capital South or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Eagle Gold vs. Sterling Capital South
Performance |
| Timeline |
| First Eagle Gold |
| Sterling Capital South |
First Eagle and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Sterling Capital
The main advantage of trading using opposite First Eagle and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's 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 |
| Sterling Capital vs. Matson Money Equity | Sterling Capital vs. John Hancock Money | Sterling Capital vs. Cref Money Market | Sterling Capital vs. Hewitt Money Market |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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