Correlation Between Transamerica Funds and First Eagle
Can any of the company-specific risk be diversified away by investing in both Transamerica Funds 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 Transamerica Funds and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Funds and First Eagle Global, you can compare the effects of market volatilities on Transamerica Funds 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 Transamerica Funds with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Funds and First Eagle.
Diversification Opportunities for Transamerica Funds and First Eagle
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transamerica and FIRST is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Funds and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global and Transamerica Funds 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 Transamerica Funds 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 Global has no effect on the direction of Transamerica Funds i.e., Transamerica Funds and First Eagle go up and down completely randomly.
Pair Corralation between Transamerica Funds and First Eagle
Assuming the 90 days horizon Transamerica Funds is expected to generate 87.0 times less return on investment than First Eagle. But when comparing it to its historical volatility, Transamerica Funds is 1.64 times less risky than First Eagle. It trades about 0.0 of its potential returns per unit of risk. First Eagle Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,163 in First Eagle Global on September 3, 2024 and sell it today you would earn a total of 212.00 from holding First Eagle Global or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.84% |
| Values | Daily Returns |
Transamerica Funds vs. First Eagle Global
Performance |
| Timeline |
| Transamerica Funds |
| First Eagle Global |
Transamerica Funds and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Funds and First Eagle
The main advantage of trading using opposite Transamerica Funds and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Funds 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.| Transamerica Funds vs. Goldman Sachs Financial | Transamerica Funds vs. John Hancock Financial | Transamerica Funds vs. Davis Financial Fund | Transamerica Funds vs. Fidelity Advisor Financial |
| First Eagle vs. Doubleline Global Bond | First Eagle vs. Mirova Global Green | First Eagle vs. 361 Global Longshort | First Eagle vs. Dreyfusstandish Global Fixed |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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