Correlation Between Eagle Small and First Eagle
Can any of the company-specific risk be diversified away by investing in both Eagle Small 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 Small 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 Small Cap and First Eagle Value, you can compare the effects of market volatilities on Eagle Small 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 Small with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Small and First Eagle.
Diversification Opportunities for Eagle Small and First Eagle
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small 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 Small 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 Small 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 Small i.e., Eagle Small and First Eagle go up and down completely randomly.
Pair Corralation between Eagle Small and First Eagle
Assuming the 90 days horizon Eagle Small Cap is expected to generate 2.86 times more return on investment than First Eagle. However, Eagle Small is 2.86 times more volatile than First Eagle Value. It trades about 0.23 of its potential returns per unit of risk. First Eagle Value is currently generating about 0.1 per unit of risk. If you would invest 2,536 in Eagle Small Cap on August 28, 2024 and sell it today you would earn a total of 181.00 from holding Eagle Small Cap or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Small Cap vs. First Eagle Value
Performance |
| Timeline |
| Eagle Small Cap |
| First Eagle Value |
Eagle Small and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Small and First Eagle
The main advantage of trading using opposite Eagle Small and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Small 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 Small vs. Pgim Jennison Technology | Eagle Small vs. Janus Global Technology | Eagle Small vs. Towpath Technology | Eagle Small vs. Biotechnology Ultrasector Profund |
| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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