Correlation Between First Eagle and Eagle Small
Can any of the company-specific risk be diversified away by investing in both First Eagle and Eagle 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 Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Value and Eagle Small Cap, you can compare the effects of market volatilities on First Eagle and Eagle 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 Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Eagle Small.
Diversification Opportunities for First Eagle and Eagle Small
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Eagle is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Value and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle 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 Value are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of First Eagle i.e., First Eagle and Eagle Small go up and down completely randomly.
Pair Corralation between First Eagle and Eagle Small
Assuming the 90 days horizon First Eagle is expected to generate 1.4 times less return on investment than Eagle Small. But when comparing it to its historical volatility, First Eagle Value is 1.93 times less risky than Eagle Small. It trades about 0.31 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,066 in Eagle Small Cap on November 9, 2024 and sell it today you would earn a total of 103.00 from holding Eagle Small Cap or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Value vs. Eagle Small Cap
Performance |
| Timeline |
| First Eagle Value |
| Eagle Small Cap |
First Eagle and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Eagle Small
The main advantage of trading using opposite First Eagle and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Eagle 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| First Eagle vs. Touchstone Small Cap | First Eagle vs. Ab Small Cap | First Eagle vs. Sp Smallcap 600 | First Eagle vs. Ab Small Cap |
| Eagle Small vs. Ab Bond Inflation | Eagle Small vs. Rbc Ultra Short Fixed | Eagle Small vs. Barings High Yield | Eagle Small vs. Ab Bond Inflation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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