Correlation Between Eldorado Gold and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Eldorado Gold and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and FTAI Aviation.
Diversification Opportunities for Eldorado Gold and FTAI Aviation
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eldorado and FTAI is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and FTAI Aviation go up and down completely randomly.
Pair Corralation between Eldorado Gold and FTAI Aviation
Considering the 90-day investment horizon Eldorado Gold is expected to generate 1.22 times less return on investment than FTAI Aviation. In addition to that, Eldorado Gold is 3.55 times more volatile than FTAI Aviation Ltd. It trades about 0.04 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.15 per unit of volatility. If you would invest 2,411 in FTAI Aviation Ltd on September 3, 2024 and sell it today you would earn a total of 377.00 from holding FTAI Aviation Ltd or generate 15.64% 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. FTAI Aviation Ltd
Performance |
| Timeline |
| Eldorado Gold Corp |
| FTAI Aviation |
Eldorado Gold and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and FTAI Aviation
The main advantage of trading using opposite Eldorado Gold and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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