Correlation Between First Eagle and Henderson Global
Can any of the company-specific risk be diversified away by investing in both First Eagle and Henderson 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 Henderson Global 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 Global Equity, you can compare the effects of market volatilities on First Eagle and Henderson 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 Henderson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Henderson Global.
Diversification Opportunities for First Eagle and Henderson Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Henderson is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas and Henderson Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Global Equity 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Global Equity has no effect on the direction of First Eagle i.e., First Eagle and Henderson Global go up and down completely randomly.
Pair Corralation between First Eagle and Henderson Global
Assuming the 90 days horizon First Eagle is expected to generate 1.2 times less return on investment than Henderson Global. But when comparing it to its historical volatility, First Eagle Overseas is 1.0 times less risky than Henderson Global. It trades about 0.05 of its potential returns per unit of risk. Henderson Global Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Henderson Global Equity on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Henderson Global Equity or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Overseas vs. Henderson Global Equity
Performance |
| Timeline |
| First Eagle Overseas |
| Henderson Global Equity |
First Eagle and Henderson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Henderson Global
The main advantage of trading using opposite First Eagle and Henderson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Henderson 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 Henderson Global will offset losses from the drop in Henderson Global'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 Global vs. Henderson Global Equity | Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Aquagold International | Henderson Global vs. Thrivent High Yield |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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