Correlation Between Small-cap Growth and First Eagle

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

By analyzing existing cross correlation between Small Cap Growth Profund and First Eagle Funds, you can compare the effects of market volatilities on Small-cap Growth 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 Small-cap Growth with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small-cap Growth and First Eagle.

Diversification Opportunities for Small-cap Growth and First Eagle

0.85

Correlation Coefficient

Small-cap Growth  First Eagle

Very poor diversification

The 3 months correlation between Small-cap and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth Profund and First Eagle Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Funds and Small-cap Growth 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 Small Cap Growth Profund 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 Funds has no effect on the direction of Small-cap Growth i.e., Small-cap Growth and First Eagle go up and down completely randomly.

Pair Corralation between Small-cap Growth and First Eagle

Assuming the 90 days horizon Small-cap Growth is expected to generate 1.19 times less return on investment than First Eagle. In addition to that, Small-cap Growth is 1.56 times more volatile than First Eagle Funds. It trades about 0.03 of its total potential returns per unit of risk. First Eagle Funds is currently generating about 0.06 per unit of volatility. If you would invest  957.00  in First Eagle Funds on May 10, 2025 and sell it today you would earn a total of  230.00  from holding First Eagle Funds or generate 24.03% return on investment over 90 days.

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

Small Cap Growth Profund  vs.  First Eagle Funds

Small Cap Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Growth Profund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Small-cap Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Eagle Funds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Funds are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Small-cap Growth and First Eagle

The main advantage of trading using opposite Small-cap Growth and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small-cap Growth 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 Small Cap Growth Profund and First Eagle Funds 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.