Correlation Between First Eagle and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both First Eagle and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on First Eagle and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Arrow Managed.
Diversification Opportunities for First Eagle and Arrow Managed
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Arrow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Value and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of First Eagle i.e., First Eagle and Arrow Managed go up and down completely randomly.
Pair Corralation between First Eagle and Arrow Managed
Assuming the 90 days horizon First Eagle Value is expected to under-perform the Arrow Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Value is 2.95 times less risky than Arrow Managed. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Arrow Managed Futures is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 542.00 in Arrow Managed Futures on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Arrow Managed Futures or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Eagle Value vs. Arrow Managed Futures
Performance |
| Timeline |
| First Eagle Value |
| Arrow Managed Futures |
First Eagle and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Arrow Managed
The main advantage of trading using opposite First Eagle and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| First Eagle vs. Arrow Managed Futures | First Eagle vs. Goldman Sachs Inflation | First Eagle vs. Deutsche Global Inflation | First Eagle vs. Schwab Treasury Inflation |
| Arrow Managed vs. Artisan Small Cap | Arrow Managed vs. Mid Cap Growth | Arrow Managed vs. L Abbett Growth | Arrow Managed vs. Chase Growth 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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