Correlation Between First Eagle and Nova Fund
Can any of the company-specific risk be diversified away by investing in both First Eagle and Nova Fund 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 Nova Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Small and Nova Fund Class, you can compare the effects of market volatilities on First Eagle and Nova Fund 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 Nova Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Nova Fund.
Diversification Opportunities for First Eagle and Nova Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Nova is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Small and Nova Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Fund Class 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 Small are associated (or correlated) with Nova Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Fund Class has no effect on the direction of First Eagle i.e., First Eagle and Nova Fund go up and down completely randomly.
Pair Corralation between First Eagle and Nova Fund
Assuming the 90 days horizon First Eagle is expected to generate 1.47 times less return on investment than Nova Fund. In addition to that, First Eagle is 1.04 times more volatile than Nova Fund Class. It trades about 0.07 of its total potential returns per unit of risk. Nova Fund Class is currently generating about 0.11 per unit of volatility. If you would invest 8,666 in Nova Fund Class on September 1, 2024 and sell it today you would earn a total of 2,241 from holding Nova Fund Class or generate 25.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Small vs. Nova Fund Class
Performance |
| Timeline |
| First Eagle Small |
| Nova Fund Class |
First Eagle and Nova Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Nova Fund
The main advantage of trading using opposite First Eagle and Nova Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Nova Fund 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 Nova Fund will offset losses from the drop in Nova Fund's long position.| First Eagle vs. Amg Managers Centersquare | First Eagle vs. Dunham Real Estate | First Eagle vs. Prudential Real Estate | First Eagle vs. Great West Real Estate |
| Nova Fund vs. Touchstone Ultra Short | Nova Fund vs. Angel Oak Ultrashort | Nova Fund vs. Goldman Sachs Short Term | Nova Fund vs. Siit Ultra Short |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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