Correlation Between First Eagle and Western Asset
Can any of the company-specific risk be diversified away by investing in both First Eagle and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on First Eagle and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Western Asset.
Diversification Opportunities for First Eagle and Western Asset
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Western is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Value and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of First Eagle i.e., First Eagle and Western Asset go up and down completely randomly.
Pair Corralation between First Eagle and Western Asset
Assuming the 90 days horizon First Eagle Value is expected to under-perform the Western Asset. In addition to that, First Eagle is 2.85 times more volatile than Western Asset High. It trades about -0.06 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.05 per unit of volatility. If you would invest 708.00 in Western Asset High on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset High or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Eagle Value vs. Western Asset High
Performance |
| Timeline |
| First Eagle Value |
| Western Asset High |
First Eagle and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Western Asset
The main advantage of trading using opposite First Eagle and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. SCOR PK | Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Via Renewables | Western Asset vs. Bondbloxx ETF Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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