Correlation Between First Eagle and Henderson European
Can any of the company-specific risk be diversified away by investing in both First Eagle and Henderson European 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 Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Overseas and Henderson European Focus, you can compare the effects of market volatilities on First Eagle and Henderson European 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 Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Henderson European.
Diversification Opportunities for First Eagle and Henderson European
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Henderson is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus 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 Overseas are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of First Eagle i.e., First Eagle and Henderson European go up and down completely randomly.
Pair Corralation between First Eagle and Henderson European
Assuming the 90 days horizon First Eagle is expected to generate 1.26 times less return on investment than Henderson European. But when comparing it to its historical volatility, First Eagle Overseas is 1.41 times less risky than Henderson European. It trades about 0.05 of its potential returns per unit of risk. Henderson European Focus is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,992 in Henderson European Focus on September 2, 2024 and sell it today you would earn a total of 656.00 from holding Henderson European Focus or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Overseas vs. Henderson European Focus
Performance |
| Timeline |
| First Eagle Overseas |
| Henderson European Focus |
First Eagle and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Henderson European
The main advantage of trading using opposite First Eagle and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| First Eagle vs. First Eagle Global | First Eagle vs. Turner Emerging Growth | First Eagle vs. Oppenheimer Developing Markets | First Eagle vs. Delaware Value Fund |
| Henderson European vs. Invesco European Small | Henderson European vs. Henderson European Focus | Henderson European vs. Invesco European Growth | Henderson European vs. Jpmorgan Intrepid European |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |