Correlation Between First Eagle and Gabelli Gold
Can any of the company-specific risk be diversified away by investing in both First Eagle and Gabelli Gold 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 Gabelli Gold 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 Gabelli Gold Fund, you can compare the effects of market volatilities on First Eagle and Gabelli Gold 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 Gabelli Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Gabelli Gold.
Diversification Opportunities for First Eagle and Gabelli Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between First and Gabelli is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli 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 Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of First Eagle i.e., First Eagle and Gabelli Gold go up and down completely randomly.
Pair Corralation between First Eagle and Gabelli Gold
Assuming the 90 days horizon First Eagle is expected to generate 1.3 times less return on investment than Gabelli Gold. But when comparing it to its historical volatility, First Eagle Gold is 1.09 times less risky than Gabelli Gold. It trades about 0.04 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,786 in Gabelli Gold Fund on August 31, 2024 and sell it today you would earn a total of 441.00 from holding Gabelli Gold Fund or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Gabelli Gold Fund
Performance |
| Timeline |
| First Eagle Gold |
| Gabelli Gold |
First Eagle and Gabelli Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Gabelli Gold
The main advantage of trading using opposite First Eagle and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Gabelli Gold 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 Gabelli Gold will offset losses from the drop in Gabelli Gold'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 |
| Gabelli Gold vs. First Eagle Gold | Gabelli Gold vs. First Eagle Gold | Gabelli Gold vs. Oppenheimer Gold Special | Gabelli Gold vs. Gold Portfolio Gold |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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