Correlation Between Eldorado Gold and BorgWarner
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and BorgWarner 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 BorgWarner 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 BorgWarner, you can compare the effects of market volatilities on Eldorado Gold and BorgWarner 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 BorgWarner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and BorgWarner.
Diversification Opportunities for Eldorado Gold and BorgWarner
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eldorado and BorgWarner is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and BorgWarner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BorgWarner 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 BorgWarner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BorgWarner has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and BorgWarner go up and down completely randomly.
Pair Corralation between Eldorado Gold and BorgWarner
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the BorgWarner. In addition to that, Eldorado Gold is 1.43 times more volatile than BorgWarner. It trades about 0.0 of its total potential returns per unit of risk. BorgWarner is currently generating about 0.04 per unit of volatility. If you would invest 3,309 in BorgWarner on September 2, 2024 and sell it today you would earn a total of 123.00 from holding BorgWarner or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. BorgWarner
Performance |
| Timeline |
| Eldorado Gold Corp |
| BorgWarner |
Eldorado Gold and BorgWarner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and BorgWarner
The main advantage of trading using opposite Eldorado Gold and BorgWarner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, BorgWarner 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 BorgWarner will offset losses from the drop in BorgWarner's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| BorgWarner vs. Lear Corporation | BorgWarner vs. Autoliv | BorgWarner vs. Fox Factory Holding | BorgWarner vs. LKQ Corporation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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