Correlation Between Eldorado Gold and 1st Federal
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and 1st Federal 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 1st Federal 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 1st Federal Savings, you can compare the effects of market volatilities on Eldorado Gold and 1st Federal 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 1st Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and 1st Federal.
Diversification Opportunities for Eldorado Gold and 1st Federal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eldorado and 1st is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and 1st Federal Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Federal Savings 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 1st Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Federal Savings has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and 1st Federal go up and down completely randomly.
Pair Corralation between Eldorado Gold and 1st Federal
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the 1st Federal. In addition to that, Eldorado Gold is 2.47 times more volatile than 1st Federal Savings. It trades about -0.09 of its total potential returns per unit of risk. 1st Federal Savings is currently generating about 0.24 per unit of volatility. If you would invest 960.00 in 1st Federal Savings on October 24, 2024 and sell it today you would earn a total of 40.00 from holding 1st Federal Savings or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. 1st Federal Savings
Performance |
| Timeline |
| Eldorado Gold Corp |
| 1st Federal Savings |
Eldorado Gold and 1st Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and 1st Federal
The main advantage of trading using opposite Eldorado Gold and 1st Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, 1st Federal 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 1st Federal will offset losses from the drop in 1st Federal's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| 1st Federal vs. Hafnia Limited | 1st Federal vs. Norfolk Southern | 1st Federal vs. United Airlines Holdings | 1st Federal vs. Mesa Air Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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