Correlation Between Eldorado Gold and Albertsons Companies
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Albertsons Companies 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 Eldorado Gold and Albertsons Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eldorado Gold Corp and Albertsons Companies, you can compare the effects of market volatilities on Eldorado Gold and Albertsons Companies 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 Eldorado Gold with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Albertsons Companies.
Diversification Opportunities for Eldorado Gold and Albertsons Companies
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eldorado and Albertsons is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and Eldorado Gold 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 Eldorado Gold Corp are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Albertsons Companies go up and down completely randomly.
Pair Corralation between Eldorado Gold and Albertsons Companies
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Albertsons Companies. In addition to that, Eldorado Gold is 3.02 times more volatile than Albertsons Companies. It trades about -0.07 of its total potential returns per unit of risk. Albertsons Companies is currently generating about 0.16 per unit of volatility. If you would invest 1,984 in Albertsons Companies on November 29, 2024 and sell it today you would earn a total of 85.00 from holding Albertsons Companies or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Albertsons Companies
Performance |
| Timeline |
| Eldorado Gold Corp |
| Albertsons Companies |
Eldorado Gold and Albertsons Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Albertsons Companies
The main advantage of trading using opposite Eldorado Gold and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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