Correlation Between First Eagle and Templeton Global
Can any of the company-specific risk be diversified away by investing in both First Eagle and Templeton Global 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 First Eagle and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and Templeton Global Bond, you can compare the effects of market volatilities on First Eagle and Templeton Global 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 First Eagle with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Templeton Global.
Diversification Opportunities for First Eagle and Templeton Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and TEMPLETON is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and First Eagle 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 First Eagle Gold are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of First Eagle i.e., First Eagle and Templeton Global go up and down completely randomly.
Pair Corralation between First Eagle and Templeton Global
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Templeton Global. In addition to that, First Eagle is 2.75 times more volatile than Templeton Global Bond. It trades about -0.17 of its total potential returns per unit of risk. Templeton Global Bond is currently generating about -0.14 per unit of volatility. If you would invest 696.00 in Templeton Global Bond on August 26, 2024 and sell it today you would lose (14.00) from holding Templeton Global Bond or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Templeton Global Bond
Performance |
| Timeline |
| First Eagle Gold |
| Templeton Global Bond |
First Eagle and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Templeton Global
The main advantage of trading using opposite First Eagle and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| First Eagle vs. Gabelli Gold Fund | First Eagle vs. International Investors Gold | First Eagle vs. Gold And Precious | First Eagle vs. Wells Fargo Advantage |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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