Correlation Between Red Oak and First Eagle

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

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

Diversification Opportunities for Red Oak and First Eagle

0.98

Correlation Coefficient

Red Oak  First Eagle

Almost no diversification

The 3 months correlation between Red and First is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology 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 Red Oak 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 Red Oak Technology 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 Red Oak i.e., Red Oak and First Eagle go up and down completely randomly.

Pair Corralation between Red Oak and First Eagle

Assuming the 90 days horizon Red Oak Technology is expected to generate 1.36 times more return on investment than First Eagle. However, Red Oak is 1.36 times more volatile than First Eagle Fund. It trades about 0.39 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.24 per unit of risk. If you would invest  4,276  in Red Oak Technology on April 30, 2025 and sell it today you would earn a total of  1,094  from holding Red Oak Technology or generate 25.58% return on investment over 90 days.

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

Red Oak Technology  vs.  First Eagle Fund

Red Oak Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Red Oak Technology are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Red Oak 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 18 (%) 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 August 2025.

Pair Trading with Red Oak and First Eagle

The main advantage of trading using opposite Red Oak and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak 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 Red Oak Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.