Correlation Between Eagle Mid and First Eagle
Can any of the company-specific risk be diversified away by investing in both Eagle Mid 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 Eagle Mid and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Mid Cap and First Eagle Value, you can compare the effects of market volatilities on Eagle Mid 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 Eagle Mid with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mid and First Eagle.
Diversification Opportunities for Eagle Mid and First Eagle
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and First is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mid Cap and First Eagle Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Value and Eagle Mid 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 Eagle Mid Cap 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 Value has no effect on the direction of Eagle Mid i.e., Eagle Mid and First Eagle go up and down completely randomly.
Pair Corralation between Eagle Mid and First Eagle
Assuming the 90 days horizon Eagle Mid Cap is expected to generate 1.9 times more return on investment than First Eagle. However, Eagle Mid is 1.9 times more volatile than First Eagle Value. It trades about 0.26 of its potential returns per unit of risk. First Eagle Value is currently generating about 0.31 per unit of risk. If you would invest 7,227 in Eagle Mid Cap on November 9, 2024 and sell it today you would earn a total of 419.00 from holding Eagle Mid Cap or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Mid Cap vs. First Eagle Value
Performance |
| Timeline |
| Eagle Mid Cap |
| First Eagle Value |
Eagle Mid and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Mid and First Eagle
The main advantage of trading using opposite Eagle Mid and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mid 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.| Eagle Mid vs. Eagle Small Cap | Eagle Mid vs. Eagle Growth Income | Eagle Mid vs. Eagle Capital Appreciation | Eagle Mid vs. Victory Sycamore Established |
| First Eagle vs. Touchstone Small Cap | First Eagle vs. Ab Small Cap | First Eagle vs. Sp Smallcap 600 | First Eagle vs. Ab Small Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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