Correlation Between First Eagle and Europac Gold
Can any of the company-specific risk be diversified away by investing in both First Eagle and Europac Gold 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 Europac Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and Europac Gold Fund, you can compare the effects of market volatilities on First Eagle and Europac Gold 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 Europac Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Europac Gold.
Diversification Opportunities for First Eagle and Europac Gold
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Europac is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Europac Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac Gold 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 Gold are associated (or correlated) with Europac Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac Gold has no effect on the direction of First Eagle i.e., First Eagle and Europac Gold go up and down completely randomly.
Pair Corralation between First Eagle and Europac Gold
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Europac Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Gold is 1.47 times less risky than Europac Gold. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Europac Gold Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 994.00 in Europac Gold Fund on August 31, 2024 and sell it today you would earn a total of 119.00 from holding Europac Gold Fund or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.29% |
| Values | Daily Returns |
First Eagle Gold vs. Europac Gold Fund
Performance |
| Timeline |
| First Eagle Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Europac Gold |
First Eagle and Europac Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Europac Gold
The main advantage of trading using opposite First Eagle and Europac Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Europac Gold 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 Europac Gold will offset losses from the drop in Europac Gold's long position.| First Eagle vs. T Rowe Price | First Eagle vs. Small Pany Growth | First Eagle vs. Legg Mason Partners | First Eagle vs. Touchstone Small Cap |
| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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