Correlation Between First Eagle and Materials Portfolio
Can any of the company-specific risk be diversified away by investing in both First Eagle and Materials Portfolio 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 Materials Portfolio 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 Materials Portfolio Fidelity, you can compare the effects of market volatilities on First Eagle and Materials Portfolio 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 Materials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Materials Portfolio.
Diversification Opportunities for First Eagle and Materials Portfolio
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIRST and Materials is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Materials Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Portfolio 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 Materials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Portfolio has no effect on the direction of First Eagle i.e., First Eagle and Materials Portfolio go up and down completely randomly.
Pair Corralation between First Eagle and Materials Portfolio
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Materials Portfolio. In addition to that, First Eagle is 2.15 times more volatile than Materials Portfolio Fidelity. It trades about -0.11 of its total potential returns per unit of risk. Materials Portfolio Fidelity is currently generating about 0.15 per unit of volatility. If you would invest 9,950 in Materials Portfolio Fidelity on September 5, 2024 and sell it today you would earn a total of 265.00 from holding Materials Portfolio Fidelity or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Eagle Gold vs. Materials Portfolio Fidelity
Performance |
| Timeline |
| First Eagle Gold |
| Materials Portfolio |
First Eagle and Materials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Materials Portfolio
The main advantage of trading using opposite First Eagle and Materials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Materials Portfolio 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 Materials Portfolio will offset losses from the drop in Materials Portfolio's long position.| First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Global | First Eagle vs. Oppenheimer Gold Special | First Eagle vs. Aquagold International |
| Materials Portfolio vs. Europac Gold Fund | Materials Portfolio vs. Goldman Sachs Short | Materials Portfolio vs. First Eagle Gold | Materials Portfolio vs. Short Precious Metals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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