Correlation Between Arrow Managed and First Eagle
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and First Eagle Global, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and First Eagle.
Diversification Opportunities for Arrow Managed and First Eagle
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arrow and First is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures 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 Arrow Managed 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 Arrow Managed Futures 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 Arrow Managed i.e., Arrow Managed and First Eagle go up and down completely randomly.
Pair Corralation between Arrow Managed and First Eagle
Assuming the 90 days horizon Arrow Managed is expected to generate 1.96 times less return on investment than First Eagle. In addition to that, Arrow Managed is 3.55 times more volatile than First Eagle Global. It trades about 0.01 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.08 per unit of volatility. If you would invest 1,174 in First Eagle Global on September 4, 2024 and sell it today you would earn a total of 205.00 from holding First Eagle Global or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. First Eagle Global
Performance |
| Timeline |
| Arrow Managed Futures |
| First Eagle Global |
Arrow Managed and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and First Eagle
The main advantage of trading using opposite Arrow Managed and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Growth Strategy Fund | Arrow Managed vs. Artisan Thematic Fund | Arrow Managed vs. Nationwide Global Equity | Arrow Managed vs. Volumetric Fund Volumetric |
| First Eagle vs. John Hancock Bond | First Eagle vs. Lord Abbett Bond | First Eagle vs. Prudential Jennison Global | First Eagle vs. Victory Sycamore Established |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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