Correlation Between Capstone Mining and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Capstone Mining 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 Capstone Mining and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Mining Corp and Eldorado Gold Corp, you can compare the effects of market volatilities on Capstone Mining 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 Capstone Mining with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Mining and Eldorado Gold.
Diversification Opportunities for Capstone Mining and Eldorado Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capstone and Eldorado is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Mining 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 Capstone Mining 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 Capstone Mining 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 Capstone Mining i.e., Capstone Mining and Eldorado Gold go up and down completely randomly.
Pair Corralation between Capstone Mining and Eldorado Gold
Assuming the 90 days horizon Capstone Mining Corp is expected to generate 1.31 times more return on investment than Eldorado Gold. However, Capstone Mining is 1.31 times more volatile than Eldorado Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.07 per unit of risk. If you would invest 470.00 in Capstone Mining Corp on August 29, 2024 and sell it today you would earn a total of 492.00 from holding Capstone Mining Corp or generate 104.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Mining Corp vs. Eldorado Gold Corp
Performance |
| Timeline |
| Capstone Mining Corp |
| Eldorado Gold Corp |
Capstone Mining and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Mining and Eldorado Gold
The main advantage of trading using opposite Capstone Mining and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Mining 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.| Capstone Mining vs. AKITA Drilling | Capstone Mining vs. Maple Peak Investments | Capstone Mining vs. Plaza Retail REIT | Capstone Mining vs. Constellation Software |
| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold Corp | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Agnico Eagle Mines |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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