Correlation Between First Eagle and Gold Portfolio
Can any of the company-specific risk be diversified away by investing in both First Eagle and Gold 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 Gold 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 Gold Portfolio Gold, you can compare the effects of market volatilities on First Eagle and Gold 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 Gold Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Gold Portfolio.
Diversification Opportunities for First Eagle and Gold Portfolio
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Gold is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Gold 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of First Eagle i.e., First Eagle and Gold Portfolio go up and down completely randomly.
Pair Corralation between First Eagle and Gold Portfolio
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Gold Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Gold is 1.09 times less risky than Gold Portfolio. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Gold Portfolio Gold is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 2,970 in Gold Portfolio Gold on August 29, 2024 and sell it today you would lose (248.00) from holding Gold Portfolio Gold or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Gold Portfolio Gold
Performance |
| Timeline |
| First Eagle Gold |
| Gold Portfolio Gold |
First Eagle and Gold Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Gold Portfolio
The main advantage of trading using opposite First Eagle and Gold Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Gold 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 Gold Portfolio will offset losses from the drop in Gold Portfolio'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 |
| Gold Portfolio vs. Fidelity Freedom 2015 | Gold Portfolio vs. Fidelity Puritan Fund | Gold Portfolio vs. Fidelity Puritan Fund | Gold Portfolio vs. Fidelity Pennsylvania Municipal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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