Correlation Between First Eagle and World Precious
Can any of the company-specific risk be diversified away by investing in both First Eagle and World Precious 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 World Precious 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 World Precious Minerals, you can compare the effects of market volatilities on First Eagle and World Precious 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 World Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and World Precious.
Diversification Opportunities for First Eagle and World Precious
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and World is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and World Precious Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Precious Minerals 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 World Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Precious Minerals has no effect on the direction of First Eagle i.e., First Eagle and World Precious go up and down completely randomly.
Pair Corralation between First Eagle and World Precious
Assuming the 90 days horizon First Eagle is expected to generate 1.25 times less return on investment than World Precious. In addition to that, First Eagle is 1.05 times more volatile than World Precious Minerals. It trades about 0.09 of its total potential returns per unit of risk. World Precious Minerals is currently generating about 0.11 per unit of volatility. If you would invest 180.00 in World Precious Minerals on April 3, 2025 and sell it today you would earn a total of 27.00 from holding World Precious Minerals or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. World Precious Minerals
Performance |
| Timeline |
| First Eagle Gold |
| World Precious Minerals |
First Eagle and World Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and World Precious
The main advantage of trading using opposite First Eagle and World Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, World Precious 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 World Precious will offset losses from the drop in World Precious' long position.| First Eagle vs. 1919 Financial Services | First Eagle vs. Icon Financial Fund | First Eagle vs. Goldman Sachs Financial | First Eagle vs. Vanguard Financials Index |
| World Precious vs. Goldman Sachs Clean | World Precious vs. Gabelli Gold Fund | World Precious vs. Precious Metals And | World Precious vs. James Balanced Golden |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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