Correlation Between First Eagle and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both First Eagle and Teton Westwood 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 Teton Westwood 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 Teton Westwood Mighty, you can compare the effects of market volatilities on First Eagle and Teton Westwood 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 Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Teton Westwood.
Diversification Opportunities for First Eagle and Teton Westwood
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Teton is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas and Teton Westwood Mighty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Mighty 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 Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Mighty has no effect on the direction of First Eagle i.e., First Eagle and Teton Westwood go up and down completely randomly.
Pair Corralation between First Eagle and Teton Westwood
Assuming the 90 days horizon First Eagle Overseas is expected to under-perform the Teton Westwood. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Overseas is 2.31 times less risky than Teton Westwood. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Teton Westwood Mighty is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Teton Westwood Mighty on September 2, 2024 and sell it today you would earn a total of 91.00 from holding Teton Westwood Mighty or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Overseas vs. Teton Westwood Mighty
Performance |
| Timeline |
| First Eagle Overseas |
| Teton Westwood Mighty |
First Eagle and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Teton Westwood
The main advantage of trading using opposite First Eagle and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Teton Westwood 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 Teton Westwood will offset losses from the drop in Teton Westwood'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 |
| Teton Westwood vs. Teton Westwood Mighty | Teton Westwood vs. The Gabelli Utilities | Teton Westwood vs. The Gabelli Small |
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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