Correlation Between Sprott Gold and First Eagle
Can any of the company-specific risk be diversified away by investing in both Sprott 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 Sprott 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 Sprott Gold Equity and First Eagle Gold, you can compare the effects of market volatilities on Sprott 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 Sprott Gold with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and First Eagle.
Diversification Opportunities for Sprott Gold and First Eagle
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sprott and FIRST is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity 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 Sprott 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 Sprott Gold Equity 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 Sprott Gold i.e., Sprott Gold and First Eagle go up and down completely randomly.
Pair Corralation between Sprott Gold and First Eagle
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.01 times more return on investment than First Eagle. However, Sprott Gold is 1.01 times more volatile than First Eagle Gold. It trades about -0.04 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 5,676 in Sprott Gold Equity on August 29, 2024 and sell it today you would lose (190.00) from holding Sprott Gold Equity or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. First Eagle Gold
Performance |
| Timeline |
| Sprott Gold Equity |
| First Eagle Gold |
Sprott Gold and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and First Eagle
The main advantage of trading using opposite Sprott Gold and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott 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.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |