Correlation Between Gamco Natural and First Eagle
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and First Eagle 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 Gamco Natural and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and First Eagle Global, you can compare the effects of market volatilities on Gamco Natural and First Eagle 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 Gamco Natural with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and First Eagle.
Diversification Opportunities for Gamco Natural and First Eagle
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gamco and First is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global and Gamco Natural 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 Gamco Natural Resources are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Global has no effect on the direction of Gamco Natural i.e., Gamco Natural and First Eagle go up and down completely randomly.
Pair Corralation between Gamco Natural and First Eagle
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the First Eagle. In addition to that, Gamco Natural is 2.05 times more volatile than First Eagle Global. It trades about -0.11 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.04 per unit of volatility. If you would invest 1,377 in First Eagle Global on September 1, 2024 and sell it today you would earn a total of 4.00 from holding First Eagle Global or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Natural Resources vs. First Eagle Global
Performance |
| Timeline |
| Gamco Natural Resources |
| First Eagle Global |
Gamco Natural and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and First Eagle
The main advantage of trading using opposite Gamco Natural and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard 500 Index | Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard Total Stock |
| First Eagle vs. T Rowe Price | First Eagle vs. Small Cap Stock | First Eagle vs. Delaware Limited Term Diversified | First Eagle vs. Tiaa Cref Smallmid Cap 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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