Correlation Between Semiconductor Ultrasector and First Eagle

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

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

Diversification Opportunities for Semiconductor Ultrasector and First Eagle

0.6

Correlation Coefficient

Semiconductor Ultrasector  First Eagle

Poor diversification

The 3 months correlation between Semiconductor and First is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Ultrasector Prof and First Eagle Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Small and Semiconductor Ultrasector 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 Semiconductor Ultrasector 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 Small has no effect on the direction of Semiconductor Ultrasector i.e., Semiconductor Ultrasector and First Eagle go up and down completely randomly.

Pair Corralation between Semiconductor Ultrasector and First Eagle

Assuming the 90 days horizon Semiconductor Ultrasector Profund is expected to generate 2.07 times more return on investment than First Eagle. However, Semiconductor Ultrasector is 2.07 times more volatile than First Eagle Small. It trades about 0.42 of its potential returns per unit of risk. First Eagle Small is currently generating about 0.24 per unit of risk. If you would invest  2,895  in Semiconductor Ultrasector Profund on April 30, 2025 and sell it today you would earn a total of  2,437  from holding Semiconductor Ultrasector Profund or generate 84.18% return on investment over 90 days.

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

Semiconductor Ultrasector Prof  vs.  First Eagle Small

Semiconductor Ultrasector

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Ultrasector Profund are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Semiconductor Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

First Eagle Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Small are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Semiconductor Ultrasector and First Eagle

The main advantage of trading using opposite Semiconductor Ultrasector and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Ultrasector 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 Semiconductor Ultrasector Profund and First Eagle Small 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.