Correlation Between Money Market and First Eagle
Can any of the company-specific risk be diversified away by investing in both Money Market 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 Money Market and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Money Market Obligations and First Eagle Fund, you can compare the effects of market volatilities on Money Market 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 Money Market with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Money Market and First Eagle.
Diversification Opportunities for Money Market and First Eagle
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Money and First is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Money Market Obligations 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 Money Market 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 Money Market Obligations 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 Money Market i.e., Money Market and First Eagle go up and down completely randomly.
Pair Corralation between Money Market and First Eagle
Assuming the 90 days horizon Money Market Obligations is expected to generate 35.61 times more return on investment than First Eagle. However, Money Market is 35.61 times more volatile than First Eagle Fund. It trades about 0.05 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.08 per unit of risk. If you would invest 91.00 in Money Market Obligations on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Money Market Obligations or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Money Market Obligations vs. First Eagle Fund
Performance |
| Timeline |
| Money Market Obligations |
| First Eagle Fund |
Money Market and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Money Market and First Eagle
The main advantage of trading using opposite Money Market and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Money Market 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.| Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard 500 Index | Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard Total Stock |
| First Eagle vs. Hewitt Money Market | First Eagle vs. Chestnut Street Exchange | First Eagle vs. Money Market Obligations | First Eagle vs. Cref Money Market |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |