Correlation Between Vanguard Small and First Eagle
Can any of the company-specific risk be diversified away by investing in both Vanguard Small 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 Small 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 Small Cap Value and First Eagle Small, you can compare the effects of market volatilities on Vanguard Small 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 Small with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and First Eagle.
Diversification Opportunities for Vanguard Small and First Eagle
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and First is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value 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 Small 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 Small Cap Value 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 Small i.e., Vanguard Small and First Eagle go up and down completely randomly.
Pair Corralation between Vanguard Small and First Eagle
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 0.84 times more return on investment than First Eagle. However, Vanguard Small Cap Value is 1.19 times less risky than First Eagle. It trades about 0.12 of its potential returns per unit of risk. First Eagle Small is currently generating about 0.1 per unit of risk. If you would invest 4,704 in Vanguard Small Cap Value on September 14, 2024 and sell it today you would earn a total of 332.00 from holding Vanguard Small Cap Value or generate 7.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Vanguard Small Cap Value vs. First Eagle Small
Performance |
Timeline |
Vanguard Small Cap |
First Eagle Small |
Vanguard Small and First Eagle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard Small and First Eagle
The main advantage of trading using opposite Vanguard Small and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small 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.Vanguard Small vs. Sentinel Small Pany | Vanguard Small vs. Pimco Diversified Income | Vanguard Small vs. Lord Abbett Diversified | Vanguard Small vs. Huber Capital Diversified |
First Eagle vs. Dreyfus Technology Growth | First Eagle vs. Towpath Technology | First Eagle vs. Science Technology Fund | First Eagle vs. Allianzgi Technology Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |