Correlation Between Afya and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Afya and Eldorado Gold 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 Afya and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Eldorado Gold Corp, you can compare the effects of market volatilities on Afya and Eldorado Gold 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 Afya with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Eldorado Gold.
Diversification Opportunities for Afya and Eldorado Gold
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Afya and Eldorado is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp and Afya 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 Afya are associated (or correlated) with Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Afya i.e., Afya and Eldorado Gold go up and down completely randomly.
Pair Corralation between Afya and Eldorado Gold
Given the investment horizon of 90 days Afya is expected to generate 3.38 times less return on investment than Eldorado Gold. In addition to that, Afya is 1.0 times more volatile than Eldorado Gold Corp. It trades about 0.02 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.07 per unit of volatility. If you would invest 817.00 in Eldorado Gold Corp on September 2, 2024 and sell it today you would earn a total of 783.00 from holding Eldorado Gold Corp or generate 95.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Eldorado Gold Corp
Performance |
| Timeline |
| Afya |
| Eldorado Gold Corp |
Afya and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Eldorado Gold
The main advantage of trading using opposite Afya and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.| Afya vs. American Public Education | Afya vs. ATA Creativity Global | Afya vs. Cogna Educacao SA | Afya vs. Adtalem Global Education |
| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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