Correlation Between Eldorado Gold and ARB
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and ARB 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 ARB 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 ARB Limited, you can compare the effects of market volatilities on Eldorado Gold and ARB 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 ARB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and ARB.
Diversification Opportunities for Eldorado Gold and ARB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eldorado and ARB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and ARB Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARB Limited 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 ARB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARB Limited has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and ARB go up and down completely randomly.
Pair Corralation between Eldorado Gold and ARB
If you would invest 1,401 in Eldorado Gold Corp on December 8, 2024 and sell it today you would earn a total of 46.00 from holding Eldorado Gold Corp or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. ARB Limited
Performance |
| Timeline |
| Eldorado Gold Corp |
| ARB Limited |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eldorado Gold and ARB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and ARB
The main advantage of trading using opposite Eldorado Gold and ARB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, ARB 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 ARB will offset losses from the drop in ARB's long position.| Eldorado Gold vs. IAMGold | ||
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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