Correlation Between Henderson Global and First Eagle
Can any of the company-specific risk be diversified away by investing in both Henderson Global 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 Henderson Global and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Global Equity and First Eagle Overseas, you can compare the effects of market volatilities on Henderson Global 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 Henderson Global with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Global and First Eagle.
Diversification Opportunities for Henderson Global and First Eagle
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Henderson and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Global Equity and First Eagle Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Overseas and Henderson Global 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 Henderson Global Equity 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 Overseas has no effect on the direction of Henderson Global i.e., Henderson Global and First Eagle go up and down completely randomly.
Pair Corralation between Henderson Global and First Eagle
Assuming the 90 days horizon Henderson Global Equity is expected to generate 1.0 times more return on investment than First Eagle. However, Henderson Global is 1.0 times more volatile than First Eagle Overseas. It trades about 0.07 of its potential returns per unit of risk. First Eagle Overseas is currently generating about 0.05 per unit of risk. If you would invest 541.00 in Henderson Global Equity on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Henderson Global Equity or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Global Equity vs. First Eagle Overseas
Performance |
| Timeline |
| Henderson Global Equity |
| First Eagle Overseas |
Henderson Global and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Global and First Eagle
The main advantage of trading using opposite Henderson Global and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Global 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.| Henderson Global vs. Henderson Global Equity | Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Aquagold International | Henderson Global vs. Thrivent High Yield |
| First Eagle vs. First Eagle Global | First Eagle vs. Turner Emerging Growth | First Eagle vs. Oppenheimer Developing Markets | First Eagle vs. Delaware Value Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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