Correlation Between Vanguard and First Eagle
Can any of the company-specific risk be diversified away by investing in both Vanguard 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 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 SP 500 and First Eagle Fund, you can compare the effects of market volatilities on Vanguard 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 with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and First Eagle.
Diversification Opportunities for Vanguard and First Eagle
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund and Vanguard 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 SP 500 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 Fund has no effect on the direction of Vanguard i.e., Vanguard and First Eagle go up and down completely randomly.
Pair Corralation between Vanguard and First Eagle
Considering the 90-day investment horizon Vanguard is expected to generate 1.0 times less return on investment than First Eagle. In addition to that, Vanguard is 1.15 times more volatile than First Eagle Fund. It trades about 0.06 of its total potential returns per unit of risk. First Eagle Fund is currently generating about 0.07 per unit of volatility. If you would invest 3,078 in First Eagle Fund on August 25, 2025 and sell it today you would earn a total of 90.00 from holding First Eagle Fund or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard SP 500 vs. First Eagle Fund
Performance |
| Timeline |
| Vanguard SP 500 |
| First Eagle Fund |
Vanguard and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and First Eagle
The main advantage of trading using opposite Vanguard and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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 vs. Vanguard Institutional Index | Vanguard vs. Vanguard Growth Index | Vanguard vs. Vanguard Growth Index | Vanguard vs. Vanguard Mid Cap Index |
| First Eagle vs. Dreyfus Municipal Bond | First Eagle vs. Pace Municipal Fixed | First Eagle vs. Nuveen All American Municipal | First Eagle vs. Prudential California Muni |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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