Correlation Between Vanguard Consumer and First Eagle

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

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

Diversification Opportunities for Vanguard Consumer and First Eagle

0.24

Correlation Coefficient

Vanguard Consumer  First Eagle

Modest diversification

The 3 months correlation between Vanguard and First is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Sumer Staples and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Vanguard Consumer 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 Vanguard Sumer Staples 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 Gold has no effect on the direction of Vanguard Consumer i.e., Vanguard Consumer and First Eagle go up and down completely randomly.

Pair Corralation between Vanguard Consumer and First Eagle

Assuming the 90 days horizon Vanguard Consumer is expected to generate 5.04 times less return on investment than First Eagle. But when comparing it to its historical volatility, Vanguard Sumer Staples is 2.19 times less risky than First Eagle. It trades about 0.09 of its potential returns per unit of risk. First Eagle Gold is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,434  in First Eagle Gold on May 14, 2025 and sell it today you would earn a total of  729.00  from holding First Eagle Gold or generate 21.23% return on investment over 90 days.

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

Vanguard Sumer Staples  vs.  First Eagle Gold

Vanguard Sumer Staples

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Sumer Staples are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Consumer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Eagle Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Gold are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Consumer and First Eagle

The main advantage of trading using opposite Vanguard Consumer and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Consumer 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 Vanguard Sumer Staples and First Eagle Gold 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 Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.