Correlation Between First Eagle and Principal Lifetime

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

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

Diversification Opportunities for First Eagle and Principal Lifetime

0.64

Correlation Coefficient

First Eagle  Principal Lifetime

Poor diversification

The 3 months correlation between First and Principal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Principal Lifetime Hybrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Lifetime Hybrid 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 Gold are associated (or correlated) with Principal Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Lifetime Hybrid has no effect on the direction of First Eagle i.e., First Eagle and Principal Lifetime go up and down completely randomly.

Pair Corralation between First Eagle and Principal Lifetime

Assuming the 90 days horizon First Eagle Gold is expected to generate 2.54 times more return on investment than Principal Lifetime. However, First Eagle is 2.54 times more volatile than Principal Lifetime Hybrid. It trades about 0.15 of its potential returns per unit of risk. Principal Lifetime Hybrid is currently generating about 0.22 per unit of risk. If you would invest  3,219  in First Eagle Gold on May 26, 2025 and sell it today you would earn a total of  462.00  from holding First Eagle Gold or generate 14.35% return on investment over 90 days.

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

First Eagle Gold  vs.  Principal Lifetime Hybrid

First Eagle Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Gold are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Principal Lifetime Hybrid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Principal Lifetime Hybrid are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Principal Lifetime may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with First Eagle and Principal Lifetime

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

The idea behind First Eagle Gold and Principal Lifetime Hybrid 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.