Correlation Between Eldorado Gold and GobiMin
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and GobiMin 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 GobiMin 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 GobiMin, you can compare the effects of market volatilities on Eldorado Gold and GobiMin 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 GobiMin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and GobiMin.
Diversification Opportunities for Eldorado Gold and GobiMin
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and GobiMin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin 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 GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and GobiMin go up and down completely randomly.
Pair Corralation between Eldorado Gold and GobiMin
If you would invest 1,039 in Eldorado Gold Corp on August 27, 2024 and sell it today you would earn a total of 617.00 from holding Eldorado Gold Corp or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
Eldorado Gold Corp vs. GobiMin
Performance |
| Timeline |
| Eldorado Gold Corp |
| GobiMin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eldorado Gold and GobiMin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and GobiMin
The main advantage of trading using opposite Eldorado Gold and GobiMin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, GobiMin 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 GobiMin will offset losses from the drop in GobiMin's long position.The idea behind Eldorado Gold Corp and GobiMin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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