Correlation Between Vanguard Information and First Eagle

Can any of the company-specific risk be diversified away by investing in both Vanguard Information 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 Information 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 Information Technology and First Eagle Small, you can compare the effects of market volatilities on Vanguard Information 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 Information with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Information and First Eagle.

Diversification Opportunities for Vanguard Information and First Eagle

0.93

Correlation Coefficient

Vanguard Information  First Eagle

Almost no diversification

The 3 months correlation between Vanguard and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Information Technolog 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 Vanguard Information 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 Information Technology 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 Vanguard Information i.e., Vanguard Information and First Eagle go up and down completely randomly.

Pair Corralation between Vanguard Information and First Eagle

Assuming the 90 days horizon Vanguard Information Technology is expected to generate 0.82 times more return on investment than First Eagle. However, Vanguard Information Technology is 1.22 times less risky than First Eagle. It trades about 0.24 of its potential returns per unit of risk. First Eagle Small is currently generating about 0.14 per unit of risk. If you would invest  31,472  in Vanguard Information Technology on May 17, 2025 and sell it today you would earn a total of  4,598  from holding Vanguard Information Technology or generate 14.61% return on investment over 90 days.

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

Vanguard Information Technolog  vs.  First Eagle Small

Vanguard Information

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Information Technology are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Information showed solid returns over the last few months and may actually be approaching a breakup point.

First Eagle Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Small are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Vanguard Information and First Eagle

The main advantage of trading using opposite Vanguard Information and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Information 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 Information Technology 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 Stocks Directory module to find actively traded stocks across global markets.