Correlation Between Eldorado Gold and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Eldorado Gold and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Harmony Gold.
Diversification Opportunities for Eldorado Gold and Harmony Gold
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and Harmony is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Harmony Gold go up and down completely randomly.
Pair Corralation between Eldorado Gold and Harmony Gold
Considering the 90-day investment horizon Eldorado Gold is expected to generate 2.79 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Eldorado Gold Corp is 1.93 times less risky than Harmony Gold. It trades about 0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Harmony Gold Mining on August 31, 2024 and sell it today you would earn a total of 475.00 from holding Harmony Gold Mining or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.01% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Eldorado Gold Corp |
| Harmony Gold Mining |
Eldorado Gold and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Harmony Gold
The main advantage of trading using opposite Eldorado Gold and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Eldorado Gold vs. Franco Nevada | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Seabridge Gold | Eldorado Gold vs. Osisko Gold Ro |
| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. BTU Metals Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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