Correlation Between Ppm High and First Eagle
Can any of the company-specific risk be diversified away by investing in both Ppm High 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 Ppm High and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ppm High Yield and First Eagle Fund, you can compare the effects of market volatilities on Ppm High 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 Ppm High with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and First Eagle.
Diversification Opportunities for Ppm High and First Eagle
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PPM and First is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund and Ppm High 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 Ppm High Yield 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 Fund has no effect on the direction of Ppm High i.e., Ppm High and First Eagle go up and down completely randomly.
Pair Corralation between Ppm High and First Eagle
Assuming the 90 days horizon Ppm High is expected to generate 1.81 times less return on investment than First Eagle. But when comparing it to its historical volatility, Ppm High Yield is 2.63 times less risky than First Eagle. It trades about 0.12 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,155 in First Eagle Fund on August 30, 2024 and sell it today you would earn a total of 805.00 from holding First Eagle Fund or generate 37.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ppm High Yield vs. First Eagle Fund
Performance |
| Timeline |
| Ppm High Yield |
| First Eagle Fund |
Ppm High and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and First Eagle
The main advantage of trading using opposite Ppm High and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High 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.| Ppm High vs. Lord Abbett Government | Ppm High vs. Aig Government Money | Ppm High vs. Us Government Securities | Ppm High vs. John Hancock Government |
| First Eagle vs. Ppm High Yield | First Eagle vs. Prudential High Yield | First Eagle vs. Fidelity Capital Income | First Eagle vs. Lord Abbett High |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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