Correlation Between Profunds Ultrashort and First Eagle

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

By analyzing existing cross correlation between Profunds Ultrashort Nasdaq 100 and First Eagle Small, you can compare the effects of market volatilities on Profunds Ultrashort 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 Profunds Ultrashort with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Ultrashort and First Eagle.

Diversification Opportunities for Profunds Ultrashort and First Eagle

-0.97

Correlation Coefficient

Profunds Ultrashort  First Eagle

Pay attention - limited upside

The 3 months correlation between Profunds and First is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Ultrashort Nasdaq 100 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 Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100 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 Profunds Ultrashort i.e., Profunds Ultrashort and First Eagle go up and down completely randomly.

Pair Corralation between Profunds Ultrashort and First Eagle

Assuming the 90 days horizon Profunds Ultrashort Nasdaq 100 is expected to under-perform the First Eagle. In addition to that, Profunds Ultrashort is 1.62 times more volatile than First Eagle Small. It trades about -0.37 of its total potential returns per unit of risk. First Eagle Small is currently generating about 0.26 per unit of volatility. If you would invest  857.00  in First Eagle Small on April 22, 2025 and sell it today you would earn a total of  179.00  from holding First Eagle Small or generate 20.89% return on investment over 90 days.

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

Profunds Ultrashort Nasdaq 100  vs.  First Eagle Small

Profunds Ultrashort

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profunds Ultrashort Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

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 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Profunds Ultrashort and First Eagle

The main advantage of trading using opposite Profunds Ultrashort and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.