Correlation Between First Eagle and Global Allocation
Can any of the company-specific risk be diversified away by investing in both First Eagle and Global Allocation 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 Global Allocation 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 Global Allocation 6040, you can compare the effects of market volatilities on First Eagle and Global Allocation 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 Global Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Global Allocation.
Diversification Opportunities for First Eagle and Global Allocation
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Global is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Global Allocation 6040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Allocation 6040 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 Global Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Allocation 6040 has no effect on the direction of First Eagle i.e., First Eagle and Global Allocation go up and down completely randomly.
Pair Corralation between First Eagle and Global Allocation
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Global Allocation. In addition to that, First Eagle is 6.45 times more volatile than Global Allocation 6040. It trades about -0.05 of its total potential returns per unit of risk. Global Allocation 6040 is currently generating about 0.02 per unit of volatility. If you would invest 2,260 in Global Allocation 6040 on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Global Allocation 6040 or generate 0.13% 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. Global Allocation 6040
Performance |
| Timeline |
| First Eagle Gold |
| Global Allocation 6040 |
First Eagle and Global Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Global Allocation
The main advantage of trading using opposite First Eagle and Global Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Global Allocation 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 Global Allocation will offset losses from the drop in Global Allocation'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 |
| Global Allocation vs. World Energy Fund | Global Allocation vs. Icon Natural Resources | Global Allocation vs. Firsthand Alternative Energy | Global Allocation vs. Tortoise Energy Independence |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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