Correlation Between First Eagle and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both First Eagle and Touchstone Small 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 Touchstone Small 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 Touchstone Small Cap, you can compare the effects of market volatilities on First Eagle and Touchstone Small 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 Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Touchstone Small.
Diversification Opportunities for First Eagle and Touchstone Small
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Touchstone is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Small Cap 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 Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of First Eagle i.e., First Eagle and Touchstone Small go up and down completely randomly.
Pair Corralation between First Eagle and Touchstone Small
Assuming the 90 days horizon First Eagle Gold is expected to generate 1.39 times more return on investment than Touchstone Small. However, First Eagle is 1.39 times more volatile than Touchstone Small Cap. It trades about 0.41 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.15 per unit of risk. If you would invest 2,349 in First Eagle Gold on November 4, 2024 and sell it today you would earn a total of 233.00 from holding First Eagle Gold or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
First Eagle Gold vs. Touchstone Small Cap
Performance |
| Timeline |
| First Eagle Gold |
| Touchstone Small Cap |
First Eagle and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Touchstone Small
The main advantage of trading using opposite First Eagle and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Touchstone Small 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 Touchstone Small will offset losses from the drop in Touchstone Small'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 |
| Touchstone Small vs. The Hartford High | Touchstone Small vs. Needham Aggressive Growth | Touchstone Small vs. Artisan High Income | Touchstone Small vs. Chartwell Short Duration |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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