Correlation Between Live Oak and First Eagle
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and First Eagle Small, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and First Eagle.
Diversification Opportunities for Live Oak and First Eagle
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and First is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and First Eagle Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Small and Live Oak 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 Live Oak Health 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 Small has no effect on the direction of Live Oak i.e., Live Oak and First Eagle go up and down completely randomly.
Pair Corralation between Live Oak and First Eagle
Assuming the 90 days horizon Live Oak Health is expected to under-perform the First Eagle. But the mutual fund apears to be less risky and, when comparing its historical volatility, Live Oak Health is 1.17 times less risky than First Eagle. The mutual fund trades about -0.3 of its potential returns per unit of risk. The First Eagle Small is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,118 in First Eagle Small on September 13, 2024 and sell it today you would lose (6.00) from holding First Eagle Small or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. First Eagle Small
Performance |
| Timeline |
| Live Oak Health |
| First Eagle Small |
Live Oak and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and First Eagle
The main advantage of trading using opposite Live Oak and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| First Eagle vs. Multisector Bond Sma | First Eagle vs. Doubleline Yield Opportunities | First Eagle vs. Versatile Bond Portfolio | First Eagle vs. Alliancebernstein National Municipal |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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