Correlation Between Armada Hflr and First Eagle

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

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

Diversification Opportunities for Armada Hflr and First Eagle

-0.38

Correlation Coefficient

Armada Hflr  First Eagle

Very good diversification

The 3 months correlation between Armada and First is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and First Eagle Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Value and Armada Hflr 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 Armada Hflr Pr 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 Value has no effect on the direction of Armada Hflr i.e., Armada Hflr and First Eagle go up and down completely randomly.

Pair Corralation between Armada Hflr and First Eagle

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the First Eagle. In addition to that, Armada Hflr is 3.22 times more volatile than First Eagle Value. It trades about -0.08 of its total potential returns per unit of risk. First Eagle Value is currently generating about 0.03 per unit of volatility. If you would invest  2,164  in First Eagle Value on September 15, 2024 and sell it today you would earn a total of  21.00  from holding First Eagle Value or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Armada Hflr Pr  vs.  First Eagle Value

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

First Eagle Value

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Value are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Armada Hflr and First Eagle

The main advantage of trading using opposite Armada Hflr and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr and First Eagle Value 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.