Correlation Between Chase Growth and First Eagle

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

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

Diversification Opportunities for Chase Growth and First Eagle

-0.61

Correlation Coefficient

Chase Growth  First Eagle

Excellent diversification

The 3 months correlation between Chase and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global and Chase Growth 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 Chase Growth Fund 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 Global has no effect on the direction of Chase Growth i.e., Chase Growth and First Eagle go up and down completely randomly.

Pair Corralation between Chase Growth and First Eagle

Assuming the 90 days horizon Chase Growth Fund is expected to under-perform the First Eagle. In addition to that, Chase Growth is 3.49 times more volatile than First Eagle Global. It trades about -0.09 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.34 per unit of volatility. If you would invest  1,310  in First Eagle Global on December 28, 2024 and sell it today you would earn a total of  107.00  from holding First Eagle Global or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chase Growth Fund  vs.  First Eagle Global

Chase Growth

Risk-Adjusted Performance

Very Weak

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

First Eagle Global

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Global are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chase Growth and First Eagle

The main advantage of trading using opposite Chase Growth and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth 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 Chase Growth Fund and First Eagle Global 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .