Correlation Between Eldorado Gold and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza, you can compare the effects of market volatilities on Eldorado Gold and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Dominos Pizza.
Diversification Opportunities for Eldorado Gold and Dominos Pizza
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eldorado and Dominos is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Dominos Pizza in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Dominos Pizza go up and down completely randomly.
Pair Corralation between Eldorado Gold and Dominos Pizza
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 1.45 times more return on investment than Dominos Pizza. However, Eldorado Gold is 1.45 times more volatile than Dominos Pizza. It trades about 0.06 of its potential returns per unit of risk. Dominos Pizza is currently generating about 0.04 per unit of risk. If you would invest 1,109 in Eldorado Gold Corp on September 12, 2024 and sell it today you would earn a total of 556.00 from holding Eldorado Gold Corp or generate 50.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Dominos Pizza
Performance |
| Timeline |
| Eldorado Gold Corp |
| Dominos Pizza |
Eldorado Gold and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Dominos Pizza
The main advantage of trading using opposite Eldorado Gold and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Dominos Pizza vs. Brinker International | Dominos Pizza vs. Jack In The | Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. Wingstop |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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