Correlation Between First Eagle and Maryland Tax-free
Can any of the company-specific risk be diversified away by investing in both First Eagle and Maryland Tax-free 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 Maryland Tax-free 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 Maryland Tax Free Bond, you can compare the effects of market volatilities on First Eagle and Maryland Tax-free 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 Maryland Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Maryland Tax-free.
Diversification Opportunities for First Eagle and Maryland Tax-free
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and Maryland is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Maryland Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maryland Tax Free 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 Maryland Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maryland Tax Free has no effect on the direction of First Eagle i.e., First Eagle and Maryland Tax-free go up and down completely randomly.
Pair Corralation between First Eagle and Maryland Tax-free
Assuming the 90 days horizon First Eagle Gold is expected to generate 5.94 times more return on investment than Maryland Tax-free. However, First Eagle is 5.94 times more volatile than Maryland Tax Free Bond. It trades about 0.02 of its potential returns per unit of risk. Maryland Tax Free Bond is currently generating about 0.05 per unit of risk. If you would invest 2,177 in First Eagle Gold on October 11, 2024 and sell it today you would earn a total of 219.00 from holding First Eagle Gold or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Maryland Tax Free Bond
Performance |
| Timeline |
| First Eagle Gold |
| Maryland Tax Free |
First Eagle and Maryland Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Maryland Tax-free
The main advantage of trading using opposite First Eagle and Maryland Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Maryland Tax-free 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 Maryland Tax-free will offset losses from the drop in Maryland Tax-free'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 |
| Maryland Tax-free vs. First Eagle Gold | Maryland Tax-free vs. Goldman Sachs Short | Maryland Tax-free vs. World Precious Minerals | Maryland Tax-free vs. Sprott Gold Equity |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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