Correlation Between Eldorado Gold and Global E
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Global E 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 Global E 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 Global E Online, you can compare the effects of market volatilities on Eldorado Gold and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Global E.
Diversification Opportunities for Eldorado Gold and Global E
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eldorado and Global is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Global E go up and down completely randomly.
Pair Corralation between Eldorado Gold and Global E
Considering the 90-day investment horizon Eldorado Gold is expected to generate 3.12 times less return on investment than Global E. But when comparing it to its historical volatility, Eldorado Gold Corp is 1.27 times less risky than Global E. It trades about 0.16 of its potential returns per unit of risk. Global E Online is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 4,253 in Global E Online on September 13, 2024 and sell it today you would earn a total of 1,281 from holding Global E Online or generate 30.12% 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. Global E Online
Performance |
| Timeline |
| Eldorado Gold Corp |
| Global E Online |
Eldorado Gold and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Global E
The main advantage of trading using opposite Eldorado Gold and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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