Correlation Between Eldorado Gold and Ardelyx
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Ardelyx 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 Ardelyx 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 Ardelyx, you can compare the effects of market volatilities on Eldorado Gold and Ardelyx 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 Ardelyx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Ardelyx.
Diversification Opportunities for Eldorado Gold and Ardelyx
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eldorado and Ardelyx is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx 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 Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Ardelyx go up and down completely randomly.
Pair Corralation between Eldorado Gold and Ardelyx
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 0.51 times more return on investment than Ardelyx. However, Eldorado Gold Corp is 1.95 times less risky than Ardelyx. It trades about -0.07 of its potential returns per unit of risk. Ardelyx is currently generating about -0.05 per unit of risk. If you would invest 1,754 in Eldorado Gold Corp on September 3, 2024 and sell it today you would lose (154.00) from holding Eldorado Gold Corp or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Ardelyx
Performance |
| Timeline |
| Eldorado Gold Corp |
| Ardelyx |
Eldorado Gold and Ardelyx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Ardelyx
The main advantage of trading using opposite Eldorado Gold and Ardelyx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Ardelyx 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 Ardelyx will offset losses from the drop in Ardelyx's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Ardelyx vs. BioLineRx | Ardelyx vs. Lexicon Pharmaceuticals | Ardelyx vs. Seres Therapeutics | Ardelyx vs. Immunitybio |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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