Correlation Between First Eagle and Vanguard Small
Can any of the company-specific risk be diversified away by investing in both First Eagle and Vanguard 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 Vanguard Small 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 Vanguard Small Cap Value, you can compare the effects of market volatilities on First Eagle and Vanguard 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 Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Vanguard Small.
Diversification Opportunities for First Eagle and Vanguard Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Small and Vanguard Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 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 Small are associated (or correlated) with Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of First Eagle i.e., First Eagle and Vanguard Small go up and down completely randomly.
Pair Corralation between First Eagle and Vanguard Small
Assuming the 90 days horizon First Eagle is expected to generate 1.12 times less return on investment than Vanguard Small. In addition to that, First Eagle is 1.2 times more volatile than Vanguard Small Cap Value. It trades about 0.07 of its total potential returns per unit of risk. Vanguard Small Cap Value is currently generating about 0.1 per unit of volatility. If you would invest 4,345 in Vanguard Small Cap Value on September 1, 2024 and sell it today you would earn a total of 835.00 from holding Vanguard Small Cap Value or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
First Eagle Small vs. Vanguard Small Cap Value
Performance |
| Timeline |
| First Eagle Small |
| Vanguard Small Cap |
First Eagle and Vanguard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Vanguard Small
The main advantage of trading using opposite First Eagle and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Vanguard 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 Vanguard Small will offset losses from the drop in Vanguard Small's long position.| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Fund |
| Vanguard Small vs. Fidelity Advisor Financial | Vanguard Small vs. Goldman Sachs Financial | Vanguard Small vs. Icon Financial Fund | Vanguard Small vs. Royce Global Financial |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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