Correlation Between Blackrock Gbl and First Eagle

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

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

Diversification Opportunities for Blackrock Gbl and First Eagle

0.7

Correlation Coefficient

Blackrock Gbl  First Eagle

Poor diversification

The 3 months correlation between Blackrock and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Gbl Alloc 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 Blackrock Gbl 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 Blackrock Gbl Alloc 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 Blackrock Gbl i.e., Blackrock Gbl and First Eagle go up and down completely randomly.

Pair Corralation between Blackrock Gbl and First Eagle

Assuming the 90 days horizon Blackrock Gbl Alloc is expected to under-perform the First Eagle. In addition to that, Blackrock Gbl is 1.1 times more volatile than First Eagle Global. It trades about -0.01 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.12 per unit of volatility. If you would invest  6,689  in First Eagle Global on December 2, 2024 and sell it today you would earn a total of  77.00  from holding First Eagle Global or generate 1.15% return on investment over 90 days.

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

Blackrock Gbl Alloc  vs.  First Eagle Global

Blackrock Gbl Alloc

Risk-Adjusted Performance

Very Weak

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

First Eagle Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Blackrock Gbl and First Eagle

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

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.