Correlation Between Eldorado Gold and Adient PLC
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Adient PLC 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 Adient PLC 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 Adient PLC, you can compare the effects of market volatilities on Eldorado Gold and Adient PLC 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 Adient PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Adient PLC.
Diversification Opportunities for Eldorado Gold and Adient PLC
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eldorado and Adient is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Adient PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adient PLC 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 Adient PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adient PLC has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Adient PLC go up and down completely randomly.
Pair Corralation between Eldorado Gold and Adient PLC
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 0.99 times more return on investment than Adient PLC. However, Eldorado Gold Corp is 1.01 times less risky than Adient PLC. It trades about 0.0 of its potential returns per unit of risk. Adient PLC is currently generating about -0.07 per unit of risk. If you would invest 1,635 in Eldorado Gold Corp on September 2, 2024 and sell it today you would lose (35.00) from holding Eldorado Gold Corp or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Adient PLC
Performance |
| Timeline |
| Eldorado Gold Corp |
| Adient PLC |
Eldorado Gold and Adient PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Adient PLC
The main advantage of trading using opposite Eldorado Gold and Adient PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Adient PLC 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 Adient PLC will offset losses from the drop in Adient PLC's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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