Correlation Between First Eagle and Materials Portfolio
Can any of the company-specific risk be diversified away by investing in both First Eagle and Materials Portfolio 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 Materials Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Overseas and Materials Portfolio Fidelity, you can compare the effects of market volatilities on First Eagle and Materials Portfolio 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 Materials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Materials Portfolio.
Diversification Opportunities for First Eagle and Materials Portfolio
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Materials is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas and Materials Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Portfolio 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 Overseas are associated (or correlated) with Materials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Portfolio has no effect on the direction of First Eagle i.e., First Eagle and Materials Portfolio go up and down completely randomly.
Pair Corralation between First Eagle and Materials Portfolio
Assuming the 90 days horizon First Eagle Overseas is expected to generate 0.62 times more return on investment than Materials Portfolio. However, First Eagle Overseas is 1.62 times less risky than Materials Portfolio. It trades about 0.08 of its potential returns per unit of risk. Materials Portfolio Fidelity is currently generating about 0.04 per unit of risk. If you would invest 2,509 in First Eagle Overseas on September 1, 2024 and sell it today you would earn a total of 237.00 from holding First Eagle Overseas or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
First Eagle Overseas vs. Materials Portfolio Fidelity
Performance |
| Timeline |
| First Eagle Overseas |
| Materials Portfolio |
First Eagle and Materials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Materials Portfolio
The main advantage of trading using opposite First Eagle and Materials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Materials Portfolio 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 Materials Portfolio will offset losses from the drop in Materials Portfolio's long position.| First Eagle vs. First Eagle Global | First Eagle vs. Calamos Growth Fund | First Eagle vs. First Eagle Value | First Eagle vs. First Eagle Gold |
| Materials Portfolio vs. Janus Global Technology | Materials Portfolio vs. Hennessy Technology Fund | Materials Portfolio vs. Mfs Technology Fund | Materials Portfolio vs. Columbia Global Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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