Correlation Between CDW Corp and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both CDW Corp 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 CDW Corp and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Eldorado Gold Corp, you can compare the effects of market volatilities on CDW Corp 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 CDW Corp with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Eldorado Gold.
Diversification Opportunities for CDW Corp and Eldorado Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDW and Eldorado is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp 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 CDW Corp 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 CDW Corp 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 CDW Corp i.e., CDW Corp and Eldorado Gold go up and down completely randomly.
Pair Corralation between CDW Corp and Eldorado Gold
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Eldorado Gold. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 1.27 times less risky than Eldorado Gold. The stock trades about -0.09 of its potential returns per unit of risk. The Eldorado Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,617 in Eldorado Gold Corp on August 29, 2024 and sell it today you would lose (29.00) from holding Eldorado Gold Corp or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Eldorado Gold Corp
Performance |
| Timeline |
| CDW Corp |
| Eldorado Gold Corp |
CDW Corp and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Eldorado Gold
The main advantage of trading using opposite CDW Corp and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |