Correlation Between First Eagle and Us Government
Can any of the company-specific risk be diversified away by investing in both First Eagle and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on First Eagle and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Us Government.
Diversification Opportunities for First Eagle and Us Government
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and RGVCX is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of First Eagle i.e., First Eagle and Us Government go up and down completely randomly.
Pair Corralation between First Eagle and Us Government
Assuming the 90 days horizon First Eagle Gold is expected to generate 3.34 times more return on investment than Us Government. However, First Eagle is 3.34 times more volatile than Us Government Securities. It trades about 0.03 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.01 per unit of risk. If you would invest 2,365 in First Eagle Gold on September 3, 2024 and sell it today you would earn a total of 124.00 from holding First Eagle Gold or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 30.71% |
| Values | Daily Returns |
First Eagle Gold vs. Us Government Securities
Performance |
| Timeline |
| First Eagle Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Us Government Securities |
First Eagle and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Us Government
The main advantage of trading using opposite First Eagle and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| First Eagle vs. Us Government Securities | First Eagle vs. Dws Government Money | First Eagle vs. Inverse Government Long | First Eagle vs. Prudential Government Income |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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