Correlation Between Adams Natural and First Eagle
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and First Eagle Value, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and First Eagle.
Diversification Opportunities for Adams Natural and First Eagle
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adams and First is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and First Eagle Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Value and Adams Natural 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 Adams Natural Resources 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 Value has no effect on the direction of Adams Natural i.e., Adams Natural and First Eagle go up and down completely randomly.
Pair Corralation between Adams Natural and First Eagle
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 0.7 times more return on investment than First Eagle. However, Adams Natural Resources is 1.44 times less risky than First Eagle. It trades about -0.19 of its potential returns per unit of risk. First Eagle Value is currently generating about -0.21 per unit of risk. If you would invest 2,339 in Adams Natural Resources on September 12, 2024 and sell it today you would lose (89.00) from holding Adams Natural Resources or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Adams Natural Resources vs. First Eagle Value
Performance |
| Timeline |
| Adams Natural Resources |
| First Eagle Value |
Adams Natural and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and First Eagle
The main advantage of trading using opposite Adams Natural and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Oxford Lane Capital | Adams Natural vs. Orchid Island Capital | Adams Natural vs. Guggenheim Strategic Opportunities | Adams Natural vs. Stone Harbor Emerging |
| First Eagle vs. Income Fund Of | First Eagle vs. Income Fund Of | First Eagle vs. Income Fund Of | First Eagle vs. Income Fund Of |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |