Correlation Between Towpath Technology and First Eagle
Can any of the company-specific risk be diversified away by investing in both Towpath Technology 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 Towpath Technology and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Towpath Technology and First Eagle Small, you can compare the effects of market volatilities on Towpath Technology 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 Towpath Technology with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Towpath Technology and First Eagle.
Diversification Opportunities for Towpath Technology and First Eagle
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Towpath and First is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Towpath Technology 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 Towpath Technology 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 Towpath 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 Towpath Technology i.e., Towpath Technology and First Eagle go up and down completely randomly.
Pair Corralation between Towpath Technology and First Eagle
Assuming the 90 days horizon Towpath Technology is expected to generate 8.08 times less return on investment than First Eagle. In addition to that, Towpath Technology is 1.5 times more volatile than First Eagle Small. It trades about 0.0 of its total potential returns per unit of risk. First Eagle Small is currently generating about 0.04 per unit of volatility. If you would invest 1,089 in First Eagle Small on September 14, 2024 and sell it today you would earn a total of 7.00 from holding First Eagle Small or generate 0.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Towpath Technology vs. First Eagle Small
Performance |
Timeline |
Towpath Technology |
First Eagle Small |
Towpath Technology and First Eagle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Towpath Technology and First Eagle
The main advantage of trading using opposite Towpath Technology and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Towpath Technology 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.Towpath Technology vs. Aqr Long Short Equity | Towpath Technology vs. Virtus Multi Sector Short | Towpath Technology vs. Franklin Federal Limited Term | Towpath Technology vs. Siit Ultra Short |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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