Correlation Between First Eagle and Hood River

Can any of the company-specific risk be diversified away by investing in both First Eagle and Hood River 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 Hood River 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 Hood River International, you can compare the effects of market volatilities on First Eagle and Hood River 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 Hood River. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Hood River.

Diversification Opportunities for First Eagle and Hood River

-0.64

Correlation Coefficient

First Eagle  Hood River

Excellent diversification

The 3 months correlation between First and Hood is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Hood River International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hood River International 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 Hood River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hood River International has no effect on the direction of First Eagle i.e., First Eagle and Hood River go up and down completely randomly.

Pair Corralation between First Eagle and Hood River

Assuming the 90 days horizon First Eagle Gold is expected to generate 0.86 times more return on investment than Hood River. However, First Eagle Gold is 1.17 times less risky than Hood River. It trades about 0.31 of its potential returns per unit of risk. Hood River International is currently generating about -0.05 per unit of risk. If you would invest  2,302  in First Eagle Gold on December 20, 2024 and sell it today you would earn a total of  645.00  from holding First Eagle Gold or generate 28.02% return on investment over 90 days.

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

First Eagle Gold  vs.  Hood River International

First Eagle Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Gold are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Hood River International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hood River International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Hood River is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Eagle and Hood River

The main advantage of trading using opposite First Eagle and Hood River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle position performs unexpectedly, Hood River 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 Hood River will offset losses from the drop in Hood River's long position.

The idea behind First Eagle Gold and Hood River International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.