Correlation Between Apogee Enterprises and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises 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 Apogee Enterprises and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Eldorado Gold Corp, you can compare the effects of market volatilities on Apogee Enterprises 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 Apogee Enterprises with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Eldorado Gold.
Diversification Opportunities for Apogee Enterprises and Eldorado Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apogee and Eldorado is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises i.e., Apogee Enterprises and Eldorado Gold go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Eldorado Gold
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.62 times more return on investment than Eldorado Gold. However, Apogee Enterprises is 1.61 times less risky than Eldorado Gold. It trades about 0.26 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.12 per unit of risk. If you would invest 7,669 in Apogee Enterprises on August 28, 2024 and sell it today you would earn a total of 818.00 from holding Apogee Enterprises or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Eldorado Gold Corp
Performance |
| Timeline |
| Apogee Enterprises |
| Eldorado Gold Corp |
Apogee Enterprises and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Eldorado Gold
The main advantage of trading using opposite Apogee Enterprises and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises 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.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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