Correlation Between Alps/kotak India and First Eagle

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

By analyzing existing cross correlation between Alpskotak India Growth and First Eagle Global, you can compare the effects of market volatilities on Alps/kotak India 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 Alps/kotak India with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alps/kotak India and First Eagle.

Diversification Opportunities for Alps/kotak India and First Eagle

0.34

Correlation Coefficient

Alps/kotak India  First Eagle

Weak diversification

The 3 months correlation between Alps/kotak and First is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alpskotak India Growth 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 Alps/kotak India 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 Alpskotak India Growth 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 Alps/kotak India i.e., Alps/kotak India and First Eagle go up and down completely randomly.

Pair Corralation between Alps/kotak India and First Eagle

Assuming the 90 days horizon Alps/kotak India is expected to generate 1.32 times less return on investment than First Eagle. In addition to that, Alps/kotak India is 1.43 times more volatile than First Eagle Global. It trades about 0.07 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.13 per unit of volatility. If you would invest  1,339  in First Eagle Global on January 30, 2025 and sell it today you would earn a total of  87.00  from holding First Eagle Global or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Alpskotak India Growth  vs.  First Eagle Global

Alpskotak India Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alpskotak India Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alps/kotak India 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

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 weak forward indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Alps/kotak India and First Eagle

The main advantage of trading using opposite Alps/kotak India and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alps/kotak India 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 Alpskotak India Growth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.