Correlation Between First Eagle and Ultramid-cap Profund

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

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

Diversification Opportunities for First Eagle and Ultramid-cap Profund

-0.55

Correlation Coefficient

First Eagle  Ultramid-cap Profund

Excellent diversification

The 3 months correlation between First and Ultramid-cap is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Ultramid Cap Profund Ultramid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultramid Cap Profund and First Eagle 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 First Eagle Gold are associated (or correlated) with Ultramid-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultramid Cap Profund has no effect on the direction of First Eagle i.e., First Eagle and Ultramid-cap Profund go up and down completely randomly.

Pair Corralation between First Eagle and Ultramid-cap Profund

If you would invest  4,052  in Ultramid Cap Profund Ultramid Cap on September 4, 2024 and sell it today you would earn a total of  1,935  from holding Ultramid Cap Profund Ultramid Cap or generate 47.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.4%
Values	Daily Returns

First Eagle Gold  vs.  Ultramid Cap Profund Ultramid

First Eagle Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Eagle Gold has generated negative risk-adjusted returns adding no value to fund investors. 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.

Ultramid Cap Profund

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultramid Cap Profund Ultramid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ultramid-cap Profund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Eagle and Ultramid-cap Profund

The main advantage of trading using opposite First Eagle and Ultramid-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Ultramid-cap Profund 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 Ultramid-cap Profund will offset losses from the drop in Ultramid-cap Profund's long position.

The idea behind First Eagle Gold and Ultramid Cap Profund Ultramid Cap 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.