Correlation Between Gold Portfolio and First Eagle
Can any of the company-specific risk be diversified away by investing in both Gold Portfolio and First Eagle 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 Gold Portfolio and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Portfolio Fidelity and First Eagle Gold, you can compare the effects of market volatilities on Gold Portfolio and First Eagle 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 Gold Portfolio with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Portfolio and First Eagle.
Diversification Opportunities for Gold Portfolio and First Eagle
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Gold and First is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Fidelity and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Gold Portfolio 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 Gold Portfolio Fidelity are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Gold Portfolio i.e., Gold Portfolio and First Eagle go up and down completely randomly.
Pair Corralation between Gold Portfolio and First Eagle
Assuming the 90 days horizon Gold Portfolio Fidelity is expected to generate 1.05 times more return on investment than First Eagle. However, Gold Portfolio is 1.05 times more volatile than First Eagle Gold. It trades about -0.14 of its potential returns per unit of risk. First Eagle Gold is currently generating about -0.21 per unit of risk. If you would invest 2,977 in Gold Portfolio Fidelity on August 28, 2024 and sell it today you would lose (180.00) from holding Gold Portfolio Fidelity or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Portfolio Fidelity vs. First Eagle Gold
Performance |
| Timeline |
| Gold Portfolio Fidelity |
| First Eagle Gold |
Gold Portfolio and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Portfolio and First Eagle
The main advantage of trading using opposite Gold Portfolio and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Portfolio position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Gold Portfolio vs. Fidelity Freedom 2015 | Gold Portfolio vs. Fidelity Puritan Fund | Gold Portfolio vs. Fidelity Puritan Fund | Gold Portfolio vs. Fidelity Pennsylvania Municipal |
| First Eagle vs. Franklin Gold Precious | First Eagle vs. First Eagle Global | First Eagle vs. Ivy Asset Strategy |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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