Correlation Between Ab Global and First Eagle

Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Global Bond and First Eagle Smid, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and First Eagle.

Diversification Opportunities for Ab Global and First Eagle

-0.63

Correlation Coefficient

Ab Global  First Eagle

Excellent diversification

The 3 months correlation between ANAGX and First is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and First Eagle Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Smid and Ab Global 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 Ab Global Bond 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 Smid has no effect on the direction of Ab Global i.e., Ab Global and First Eagle go up and down completely randomly.

Pair Corralation between Ab Global and First Eagle

Assuming the 90 days horizon Ab Global Bond is expected to generate 0.23 times more return on investment than First Eagle. However, Ab Global Bond is 4.27 times less risky than First Eagle. It trades about 0.07 of its potential returns per unit of risk. First Eagle Smid is currently generating about -0.11 per unit of risk. If you would invest  682.00  in Ab Global Bond on December 20, 2024 and sell it today you would earn a total of  7.00  from holding Ab Global Bond or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Ab Global Bond  vs.  First Eagle Smid

Ab Global Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global Bond are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Eagle Smid

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Eagle Smid has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ab Global and First Eagle

The main advantage of trading using opposite Ab Global and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.

The idea behind Ab Global Bond and First Eagle Smid pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.