Correlation Between First Eagle and American Funds
Can any of the company-specific risk be diversified away by investing in both First Eagle and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Global and American Funds Retirement, you can compare the effects of market volatilities on First Eagle and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and American Funds.
Diversification Opportunities for First Eagle and American Funds
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and American is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and American Funds Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Retirement 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 Global are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Retirement has no effect on the direction of First Eagle i.e., First Eagle and American Funds go up and down completely randomly.
Pair Corralation between First Eagle and American Funds
Assuming the 90 days horizon First Eagle is expected to generate 4.93 times less return on investment than American Funds. In addition to that, First Eagle is 1.5 times more volatile than American Funds Retirement. It trades about 0.03 of its total potential returns per unit of risk. American Funds Retirement is currently generating about 0.23 per unit of volatility. If you would invest 1,188 in American Funds Retirement on September 4, 2024 and sell it today you would earn a total of 17.00 from holding American Funds Retirement or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Eagle Global vs. American Funds Retirement
Performance |
| Timeline |
| First Eagle Global |
| American Funds Retirement |
First Eagle and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and American Funds
The main advantage of trading using opposite First Eagle and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| First Eagle vs. Blackrock Gbl Alloc | First Eagle vs. Ivy Asset Strategy | First Eagle vs. Fpa Crescent Fund | First Eagle vs. Templeton Global Bond |
| American Funds vs. Us Vector Equity | American Funds vs. Ultra Short Fixed Income | American Funds vs. Ms Global Fixed | American Funds vs. Artisan Select Equity |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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