Correlation Between Eldorado Gold and Lagardere
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Lagardere 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 Lagardere 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 Lagardere SA, you can compare the effects of market volatilities on Eldorado Gold and Lagardere 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 Lagardere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Lagardere.
Diversification Opportunities for Eldorado Gold and Lagardere
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eldorado and Lagardere is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Lagardere SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagardere SA 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 Lagardere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagardere SA has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Lagardere go up and down completely randomly.
Pair Corralation between Eldorado Gold and Lagardere
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 1.56 times more return on investment than Lagardere. However, Eldorado Gold is 1.56 times more volatile than Lagardere SA. It trades about 0.07 of its potential returns per unit of risk. Lagardere SA is currently generating about 0.03 per unit of risk. If you would invest 867.00 in Eldorado Gold Corp on September 14, 2024 and sell it today you would earn a total of 857.00 from holding Eldorado Gold Corp or generate 98.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Lagardere SA
Performance |
| Timeline |
| Eldorado Gold Corp |
| Lagardere SA |
Eldorado Gold and Lagardere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Lagardere
The main advantage of trading using opposite Eldorado Gold and Lagardere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Lagardere 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 Lagardere will offset losses from the drop in Lagardere's long position.| Eldorado Gold vs. Fortitude Gold Corp | Eldorado Gold vs. New Gold | Eldorado Gold vs. Galiano Gold | Eldorado Gold vs. GoldMining |
| Lagardere vs. Stratasys | Lagardere vs. Zoom Video Communications | Lagardere vs. Iridium Communications | Lagardere vs. Eldorado Gold 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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