Correlation Between First Eagle and Blackrock Health
Can any of the company-specific risk be diversified away by investing in both First Eagle and Blackrock Health 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 Blackrock Health 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 Blackrock Health Sciences, you can compare the effects of market volatilities on First Eagle and Blackrock Health 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 Blackrock Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Blackrock Health.
Diversification Opportunities for First Eagle and Blackrock Health
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIRST and Blackrock is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Blackrock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Health Sciences 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 Blackrock Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Health Sciences has no effect on the direction of First Eagle i.e., First Eagle and Blackrock Health go up and down completely randomly.
Pair Corralation between First Eagle and Blackrock Health
Assuming the 90 days horizon First Eagle is expected to generate 1.13 times less return on investment than Blackrock Health. But when comparing it to its historical volatility, First Eagle Global is 1.94 times less risky than Blackrock Health. It trades about 0.05 of its potential returns per unit of risk. Blackrock Health Sciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,479 in Blackrock Health Sciences on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Blackrock Health Sciences or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Global vs. Blackrock Health Sciences
Performance |
| Timeline |
| First Eagle Global |
| Blackrock Health Sciences |
First Eagle and Blackrock Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Blackrock Health
The main advantage of trading using opposite First Eagle and Blackrock Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Blackrock Health 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 Blackrock Health will offset losses from the drop in Blackrock Health's 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 |
| Blackrock Health vs. Blackrock Science Technology | Blackrock Health vs. Blackrock Mid Cap | Blackrock Health vs. First Eagle Global | Blackrock Health vs. Blackrock Health Sciences |
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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