Correlation Between First Eagle and American Mutual
Can any of the company-specific risk be diversified away by investing in both First Eagle and American Mutual 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 American Mutual 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 American Mutual Fund, you can compare the effects of market volatilities on First Eagle and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and American Mutual.
Diversification Opportunities for First Eagle and American Mutual
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Value and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of First Eagle i.e., First Eagle and American Mutual go up and down completely randomly.
Pair Corralation between First Eagle and American Mutual
Assuming the 90 days horizon First Eagle is expected to generate 1.57 times less return on investment than American Mutual. But when comparing it to its historical volatility, First Eagle Value is 1.4 times less risky than American Mutual. It trades about 0.25 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,814 in American Mutual Fund on September 2, 2024 and sell it today you would earn a total of 210.00 from holding American Mutual Fund or generate 3.61% 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 Value vs. American Mutual Fund
Performance |
| Timeline |
| First Eagle Value |
| American Mutual |
First Eagle and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and American Mutual
The main advantage of trading using opposite First Eagle and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| First Eagle vs. American Mutual Fund | First Eagle vs. Tax Managed Large Cap | First Eagle vs. Large Cap Growth Profund | First Eagle vs. Legg Mason Bw |
| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |