Correlation Between First Eagle and Short Precious
Can any of the company-specific risk be diversified away by investing in both First Eagle and Short Precious 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 Short Precious 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 Short Precious Metals, you can compare the effects of market volatilities on First Eagle and Short Precious 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 Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Short Precious.
Diversification Opportunities for First Eagle and Short Precious
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Short is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals 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 Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of First Eagle i.e., First Eagle and Short Precious go up and down completely randomly.
Pair Corralation between First Eagle and Short Precious
Assuming the 90 days horizon First Eagle Gold is expected to generate 0.73 times more return on investment than Short Precious. However, First Eagle Gold is 1.36 times less risky than Short Precious. It trades about 0.35 of its potential returns per unit of risk. Short Precious Metals is currently generating about -0.23 per unit of risk. If you would invest 2,475 in First Eagle Gold on November 27, 2024 and sell it today you would earn a total of 252.00 from holding First Eagle Gold or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Short Precious Metals
Performance |
| Timeline |
| First Eagle Gold |
| Short Precious Metals |
First Eagle and Short Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Short Precious
The main advantage of trading using opposite First Eagle and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' 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 |
| Short Precious vs. Short Real Estate | Short Precious vs. Short Real Estate | Short Precious vs. Ultrashort Mid Cap Profund | Short Precious vs. Ultrashort Mid Cap Profund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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