Correlation Between Small Pany and First Eagle
Can any of the company-specific risk be diversified away by investing in both Small Pany 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 Small Pany and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and First Eagle Gold, you can compare the effects of market volatilities on Small Pany 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 Small Pany with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and First Eagle.
Diversification Opportunities for Small Pany and First Eagle
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Small and First is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Small Pany 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 Small Pany Growth 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 Gold has no effect on the direction of Small Pany i.e., Small Pany and First Eagle go up and down completely randomly.
Pair Corralation between Small Pany and First Eagle
Assuming the 90 days horizon Small Pany Growth is expected to generate 1.77 times more return on investment than First Eagle. However, Small Pany is 1.77 times more volatile than First Eagle Gold. It trades about 0.06 of its potential returns per unit of risk. First Eagle Gold is currently generating about -0.03 per unit of risk. If you would invest 1,098 in Small Pany Growth on August 31, 2024 and sell it today you would earn a total of 544.00 from holding Small Pany Growth or generate 49.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.31% |
| Values | Daily Returns |
Small Pany Growth vs. First Eagle Gold
Performance |
| Timeline |
| Small Pany Growth |
| First Eagle Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Small Pany and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Pany and First Eagle
The main advantage of trading using opposite Small Pany and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pany 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.| Small Pany vs. The Hartford Midcap | Small Pany vs. Mfs Emerging Markets | Small Pany vs. Wells Fargo Special | Small Pany vs. Baron Emerging Markets |
| First Eagle vs. T Rowe Price | First Eagle vs. Small Pany Growth | First Eagle vs. Legg Mason Partners | First Eagle vs. Touchstone Small Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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