Correlation Between First Eagle and First Eagle

Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and First Eagle 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 First Eagle Global, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and First Eagle.

Diversification Opportunities for First Eagle and First Eagle

0.96

Correlation Coefficient

First Eagle  First Eagle

Almost no diversification

The 3 months correlation between First and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas 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 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 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 First Eagle i.e., First Eagle and First Eagle go up and down completely randomly.

Pair Corralation between First Eagle and First Eagle

Assuming the 90 days horizon First Eagle Overseas is expected to generate 1.32 times more return on investment than First Eagle. However, First Eagle is 1.32 times more volatile than First Eagle Global. It trades about 0.08 of its potential returns per unit of risk. First Eagle Global is currently generating about 0.06 per unit of risk. If you would invest  2,584  in First Eagle Overseas on February 5, 2024 and sell it today you would earn a total of  25.00  from holding First Eagle Overseas or generate 0.97% 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.  First Eagle Global

First Eagle Overseas

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Overseas are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, First Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Eagle Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Global are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, First Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Eagle and First Eagle

The main advantage of trading using opposite First Eagle and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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.

The idea behind First Eagle Overseas and First Eagle Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.