Correlation Between First Eagle and Ares Commercial

Can any of the company-specific risk be diversified away by investing in both First Eagle and Ares Commercial 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 Ares Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Eagle Alternative and Ares Commercial Real, you can compare the effects of market volatilities on First Eagle and Ares Commercial 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 Ares Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Ares Commercial.

Diversification Opportunities for First Eagle and Ares Commercial

0.43

Correlation Coefficient

First Eagle  Ares Commercial

Very weak diversification

The 3 months correlation between First and Ares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Alternative and Ares Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Commercial Real 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 Alternative are associated (or correlated) with Ares Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Commercial Real has no effect on the direction of First Eagle i.e., First Eagle and Ares Commercial go up and down completely randomly.

Pair Corralation between First Eagle and Ares Commercial

Given the investment horizon of 90 days First Eagle is expected to generate 4.99 times less return on investment than Ares Commercial. But when comparing it to its historical volatility, First Eagle Alternative is 9.25 times less risky than Ares Commercial. It trades about 0.14 of its potential returns per unit of risk. Ares Commercial Real is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  404.00  in Ares Commercial Real on May 5, 2025 and sell it today you would earn a total of  40.00  from holding Ares Commercial Real or generate 9.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Eagle Alternative  vs.  Ares Commercial Real

First Eagle Alternative

Risk-Adjusted Performance

OK

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

Ares Commercial Real

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ares Commercial Real are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Ares Commercial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with First Eagle and Ares Commercial

The main advantage of trading using opposite First Eagle and Ares Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Ares Commercial 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 Ares Commercial will offset losses from the drop in Ares Commercial's long position.

The idea behind First Eagle Alternative and Ares Commercial Real 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..