Correlation Between First Eagle and Dws Emerging

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

Diversification Opportunities for First Eagle and Dws Emerging

0.59

Correlation Coefficient

First Eagle  Dws Emerging

Very weak diversification

The 3 months correlation between FIRST and Dws is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Dws Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Emerging Markets 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 Dws Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Emerging Markets has no effect on the direction of First Eagle i.e., First Eagle and Dws Emerging go up and down completely randomly.

Pair Corralation between First Eagle and Dws Emerging

Assuming the 90 days horizon First Eagle Gold is expected to generate 1.54 times more return on investment than Dws Emerging. However, First Eagle is 1.54 times more volatile than Dws Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Dws Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest  2,070  in First Eagle Gold on September 3, 2024 and sell it today you would earn a total of  520.00  from holding First Eagle Gold or generate 25.12% return on investment over 90 days.

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

First Eagle Gold  vs.  Dws Emerging Markets

First Eagle Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Gold are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, First Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dws Emerging Markets

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dws Emerging Markets are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dws Emerging 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 Dws Emerging

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

The idea behind First Eagle Gold and Dws Emerging Markets 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.