Correlation Between First Eagle and Calvert Conservative

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

By analyzing existing cross correlation between First Eagle Global and Calvert Servative Allocation, you can compare the effects of market volatilities on First Eagle and Calvert Conservative 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 Calvert Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Calvert Conservative.

Diversification Opportunities for First Eagle and Calvert Conservative

0.75

Correlation Coefficient

First Eagle  Calvert Conservative

Poor diversification

The 3 months correlation between First and Calvert is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Calvert Servative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Conservative 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 Global are associated (or correlated) with Calvert Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Conservative has no effect on the direction of First Eagle i.e., First Eagle and Calvert Conservative go up and down completely randomly.

Pair Corralation between First Eagle and Calvert Conservative

Assuming the 90 days horizon First Eagle Global is expected to generate 1.61 times more return on investment than Calvert Conservative. However, First Eagle is 1.61 times more volatile than Calvert Servative Allocation. It trades about 0.19 of its potential returns per unit of risk. Calvert Servative Allocation is currently generating about 0.0 per unit of risk. If you would invest  6,732  in First Eagle Global on December 29, 2024 and sell it today you would earn a total of  472.00  from holding First Eagle Global or generate 7.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

First Eagle Global  vs.  Calvert Servative Allocation

First Eagle Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Global are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Calvert Conservative

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calvert Servative Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Calvert Conservative 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 Calvert Conservative

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

The idea behind First Eagle Global and Calvert Servative Allocation 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.