Correlation Between Rational Strategic and First Eagle

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

By analyzing existing cross correlation between Rational Strategic Allocation and First Eagle Fund, you can compare the effects of market volatilities on Rational Strategic 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 Rational Strategic with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Strategic and First Eagle.

Diversification Opportunities for Rational Strategic and First Eagle

0.96

Correlation Coefficient

Rational Strategic  First Eagle

Almost no diversification

The 3 months correlation between Rational and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Rational Strategic Allocation and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund and Rational Strategic 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 Rational Strategic Allocation 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 Fund has no effect on the direction of Rational Strategic i.e., Rational Strategic and First Eagle go up and down completely randomly.

Pair Corralation between Rational Strategic and First Eagle

Assuming the 90 days horizon Rational Strategic Allocation is expected to generate 1.81 times more return on investment than First Eagle. However, Rational Strategic is 1.81 times more volatile than First Eagle Fund. It trades about 0.23 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.31 per unit of risk. If you would invest  734.00  in Rational Strategic Allocation on May 26, 2025 and sell it today you would earn a total of  125.00  from holding Rational Strategic Allocation or generate 17.03% return on investment over 90 days.

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

Rational Strategic Allocation  vs.  First Eagle Fund

Rational Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Strategic Allocation are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rational Strategic showed solid returns over the last few months and may actually be approaching a breakup point.

First Eagle Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Fund are ranked lower than 24 (%) 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 September 2025.

Pair Trading with Rational Strategic and First Eagle

The main advantage of trading using opposite Rational Strategic and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Strategic 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 Rational Strategic Allocation and First Eagle Fund 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.