Correlation Between The Gold and First Eagle
Can any of the company-specific risk be diversified away by investing in both The Gold 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 The Gold and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bullion and First Eagle Gold, you can compare the effects of market volatilities on The Gold 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 The Gold with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gold and First Eagle.
Diversification Opportunities for The Gold and First Eagle
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and FIRST is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bullion 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 The Gold 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 The Gold Bullion 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 The Gold i.e., The Gold and First Eagle go up and down completely randomly.
Pair Corralation between The Gold and First Eagle
Assuming the 90 days horizon The Gold Bullion is expected to generate 0.64 times more return on investment than First Eagle. However, The Gold Bullion is 1.56 times less risky than First Eagle. It trades about 0.0 of its potential returns per unit of risk. First Eagle Gold is currently generating about -0.04 per unit of risk. If you would invest 2,611 in The Gold Bullion on August 29, 2024 and sell it today you would lose (9.00) from holding The Gold Bullion or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bullion vs. First Eagle Gold
Performance |
| Timeline |
| Gold Bullion |
| First Eagle Gold |
The Gold and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Gold and First Eagle
The main advantage of trading using opposite The Gold and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gold 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.| The Gold vs. Quantified Market Leaders | The Gold vs. Quantified Managed Income | The Gold vs. Quantified Alternative Investment | The Gold vs. Quantified Stf Fund |
| First Eagle vs. First Eagle Gold | First Eagle vs. Oppenheimer Gold Special | First Eagle vs. Aquagold International | First Eagle vs. Morningstar Unconstrained Allocation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Correlations Find global opportunities by holding instruments from different markets |