Correlation Between First Eagle and Blackrock Gbl
Can any of the company-specific risk be diversified away by investing in both First Eagle and Blackrock Gbl 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 Blackrock Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Global and Blackrock Gbl Alloc, you can compare the effects of market volatilities on First Eagle and Blackrock Gbl 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 Blackrock Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Blackrock Gbl.
Diversification Opportunities for First Eagle and Blackrock Gbl
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Blackrock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Blackrock Gbl Alloc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Gbl Alloc 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 Global are associated (or correlated) with Blackrock Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Gbl Alloc has no effect on the direction of First Eagle i.e., First Eagle and Blackrock Gbl go up and down completely randomly.
Pair Corralation between First Eagle and Blackrock Gbl
Assuming the 90 days horizon First Eagle Global is expected to generate 1.15 times more return on investment than Blackrock Gbl. However, First Eagle is 1.15 times more volatile than Blackrock Gbl Alloc. It trades about 0.09 of its potential returns per unit of risk. Blackrock Gbl Alloc is currently generating about 0.07 per unit of risk. If you would invest 5,585 in First Eagle Global on August 30, 2024 and sell it today you would earn a total of 1,795 from holding First Eagle Global or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Global vs. Blackrock Gbl Alloc
Performance |
| Timeline |
| First Eagle Global |
| Blackrock Gbl Alloc |
First Eagle and Blackrock Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Blackrock Gbl
The main advantage of trading using opposite First Eagle and Blackrock Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Blackrock Gbl 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 Blackrock Gbl will offset losses from the drop in Blackrock Gbl's long position.| First Eagle vs. John Hancock Bond | First Eagle vs. Lord Abbett Bond | First Eagle vs. Prudential Jennison Global | First Eagle vs. Victory Sycamore Established |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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