Correlation Between NYSE Composite and First Eagle
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and First Eagle Small, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and First Eagle.
Diversification Opportunities for NYSE Composite and First Eagle
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and First Eagle go up and down completely randomly.
Pair Corralation between NYSE Composite and First Eagle
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.17 times less return on investment than First Eagle. But when comparing it to its historical volatility, NYSE Composite is 1.86 times less risky than First Eagle. It trades about 0.11 of its potential returns per unit of risk. First Eagle Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 984.00 in First Eagle Small on September 1, 2024 and sell it today you would earn a total of 162.00 from holding First Eagle Small or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
NYSE Composite vs. First Eagle Small
Performance |
| Timeline |
NYSE Composite and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
First Eagle Small
Pair trading matchups for First Eagle
Pair Trading with NYSE Composite and First Eagle
The main advantage of trading using opposite NYSE Composite and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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