Correlation Between Eldorado Gold and Fortress Transp
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Fortress Transp 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 Fortress Transp 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 Fortress Transp Infra, you can compare the effects of market volatilities on Eldorado Gold and Fortress Transp 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 Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Fortress Transp.
Diversification Opportunities for Eldorado Gold and Fortress Transp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eldorado and Fortress is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Fortress Transp go up and down completely randomly.
Pair Corralation between Eldorado Gold and Fortress Transp
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Fortress Transp. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 1.12 times less risky than Fortress Transp. The stock trades about -0.06 of its potential returns per unit of risk. The Fortress Transp Infra is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 13,729 in Fortress Transp Infra on September 4, 2024 and sell it today you would earn a total of 2,951 from holding Fortress Transp Infra or generate 21.49% 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. Fortress Transp Infra
Performance |
| Timeline |
| Eldorado Gold Corp |
| Fortress Transp Infra |
Eldorado Gold and Fortress Transp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Fortress Transp
The main advantage of trading using opposite Eldorado Gold and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.| Eldorado Gold vs. Constellium Nv | Eldorado Gold vs. Century Aluminum | Eldorado Gold vs. China Hongqiao Group | Eldorado Gold vs. Kaiser Aluminum |
| Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Herc Holdings | Fortress Transp vs. Alta Equipment 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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