Correlation Between First Eagle and Templeton Global
Can any of the company-specific risk be diversified away by investing in both First Eagle and Templeton Global 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 Templeton Global 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 Templeton Global Balanced, you can compare the effects of market volatilities on First Eagle and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Templeton Global.
Diversification Opportunities for First Eagle and Templeton Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Templeton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Balanced has no effect on the direction of First Eagle i.e., First Eagle and Templeton Global go up and down completely randomly.
Pair Corralation between First Eagle and Templeton Global
Assuming the 90 days horizon First Eagle Gold is expected to generate 2.25 times more return on investment than Templeton Global. However, First Eagle is 2.25 times more volatile than Templeton Global Balanced. It trades about 0.36 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.38 per unit of risk. If you would invest 2,280 in First Eagle Gold on November 1, 2024 and sell it today you would earn a total of 207.00 from holding First Eagle Gold or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Templeton Global Balanced
Performance |
| Timeline |
| First Eagle Gold |
| Templeton Global Balanced |
First Eagle and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Templeton Global
The main advantage of trading using opposite First Eagle and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global'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 |
| Templeton Global vs. Oppenheimer Gold Special | Templeton Global vs. Franklin Gold Precious | Templeton Global vs. First Eagle Gold | Templeton Global vs. Fidelity Advisor 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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