Correlation Between First Eagle and Munivest Fund

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

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

Diversification Opportunities for First Eagle and Munivest Fund

0.69

Correlation Coefficient

First Eagle  Munivest Fund

Poor diversification

The 3 months correlation between First and Munivest is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle High and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 High are associated (or correlated) with Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of First Eagle i.e., First Eagle and Munivest Fund go up and down completely randomly.

Pair Corralation between First Eagle and Munivest Fund

Assuming the 90 days horizon First Eagle High is expected to generate 0.42 times more return on investment than Munivest Fund. However, First Eagle High is 2.37 times less risky than Munivest Fund. It trades about 0.12 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.01 per unit of risk. If you would invest  820.00  in First Eagle High on March 3, 2024 and sell it today you would earn a total of  15.00  from holding First Eagle High or generate 1.83% return on investment over 90 days.

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

First Eagle High  vs.  Munivest Fund

First Eagle High

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle High are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, First Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Munivest Fund

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Munivest Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Eagle and Munivest Fund

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

The idea behind First Eagle High and Munivest Fund 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.