Correlation Between Causeway International and First Eagle

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

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

Diversification Opportunities for Causeway International and First Eagle

0.68

Correlation Coefficient

Causeway International  First Eagle

Poor diversification

The 3 months correlation between Causeway and First is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Causeway International Value and First Eagle Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Overseas and Causeway International 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 Causeway International Value 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 Overseas has no effect on the direction of Causeway International i.e., Causeway International and First Eagle go up and down completely randomly.

Pair Corralation between Causeway International and First Eagle

Assuming the 90 days horizon Causeway International is expected to generate 1.22 times less return on investment than First Eagle. In addition to that, Causeway International is 1.31 times more volatile than First Eagle Overseas. It trades about 0.13 of its total potential returns per unit of risk. First Eagle Overseas is currently generating about 0.2 per unit of volatility. If you would invest  3,064  in First Eagle Overseas on August 30, 2025 and sell it today you would earn a total of  250.00  from holding First Eagle Overseas or generate 8.16% return on investment over 90 days.

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

Causeway International Value  vs.  First Eagle Overseas

Causeway International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Causeway International Value are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Causeway International may actually be approaching a critical reversion point that can send shares even higher in December 2025.

First Eagle Overseas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Overseas are ranked lower than 16 (%) 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 December 2025.

Pair Trading with Causeway International and First Eagle

The main advantage of trading using opposite Causeway International and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway International 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 Causeway International Value and First Eagle Overseas 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.