Correlation Between First Eagle and World Precious
Can any of the company-specific risk be diversified away by investing in both First Eagle and World Precious 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 World Precious 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 World Precious Minerals, you can compare the effects of market volatilities on First Eagle and World Precious 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 World Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and World Precious.
Diversification Opportunities for First Eagle and World Precious
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FIRST and World is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and World Precious Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Precious Minerals 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 World Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Precious Minerals has no effect on the direction of First Eagle i.e., First Eagle and World Precious go up and down completely randomly.
Pair Corralation between First Eagle and World Precious
Assuming the 90 days horizon First Eagle Gold is expected to generate 1.18 times more return on investment than World Precious. However, First Eagle is 1.18 times more volatile than World Precious Minerals. It trades about -0.12 of its potential returns per unit of risk. World Precious Minerals is currently generating about -0.27 per unit of risk. If you would invest 3,018 in First Eagle Gold on September 3, 2024 and sell it today you would lose (140.00) from holding First Eagle Gold or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. World Precious Minerals
Performance |
| Timeline |
| First Eagle Gold |
| World Precious Minerals |
First Eagle and World Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and World Precious
The main advantage of trading using opposite First Eagle and World Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, World Precious 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 World Precious will offset losses from the drop in World Precious' long position.| First Eagle vs. First Eagle Gold | First Eagle vs. Oppenheimer Gold Spec | First Eagle vs. Oppenheimer Gold Special | First Eagle vs. Gold Portfolio Gold |
| World Precious vs. Mirova Global Green | World Precious vs. Artisan Global Unconstrained | World Precious vs. Commonwealth Global Fund | World Precious vs. 361 Global Longshort |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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