Correlation Between First Eagle and Global E
Can any of the company-specific risk be diversified away by investing in both First Eagle and Global E 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 Global E 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 Global E Portfolio, you can compare the effects of market volatilities on First Eagle and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Global E.
Diversification Opportunities for First Eagle and Global E
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of First Eagle i.e., First Eagle and Global E go up and down completely randomly.
Pair Corralation between First Eagle and Global E
Assuming the 90 days horizon First Eagle Gold is expected to under-perform the Global E. In addition to that, First Eagle is 2.45 times more volatile than Global E Portfolio. It trades about -0.06 of its total potential returns per unit of risk. Global E Portfolio is currently generating about 0.2 per unit of volatility. If you would invest 2,017 in Global E Portfolio on September 12, 2024 and sell it today you would earn a total of 175.00 from holding Global E Portfolio or generate 8.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Eagle Gold vs. Global E Portfolio
Performance |
Timeline |
First Eagle Gold |
Global E Portfolio |
First Eagle and Global E Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Eagle and Global E
The main advantage of trading using opposite First Eagle and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Gold | First Eagle vs. Franklin Gold Precious | First Eagle vs. First Eagle Global |
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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.
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