Correlation Between Simt Large and First Eagle

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

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

Diversification Opportunities for Simt Large and First Eagle

-0.49

Correlation Coefficient

Simt Large  First Eagle

Very good diversification

The 3 months correlation between Simt and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap and First Eagle High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle High and Simt Large 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 Simt Large Cap 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 High has no effect on the direction of Simt Large i.e., Simt Large and First Eagle go up and down completely randomly.

Pair Corralation between Simt Large and First Eagle

Assuming the 90 days horizon Simt Large Cap is expected to generate 1.7 times more return on investment than First Eagle. However, Simt Large is 1.7 times more volatile than First Eagle High. It trades about 0.2 of its potential returns per unit of risk. First Eagle High is currently generating about -0.15 per unit of risk. If you would invest  1,482  in Simt Large Cap on May 16, 2025 and sell it today you would earn a total of  123.00  from holding Simt Large Cap or generate 8.3% return on investment over 90 days.

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

Simt Large Cap  vs.  First Eagle High

Simt Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Large Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Simt Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

First Eagle High

Risk-Adjusted Performance

Weakest

Over the last 90 days First Eagle High has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, First Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Large and First Eagle

The main advantage of trading using opposite Simt Large and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Large 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 Simt Large Cap and First Eagle High 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.