Correlation Between Eldorado Gold and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and ServiceNow 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 ServiceNow 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 ServiceNow, you can compare the effects of market volatilities on Eldorado Gold and ServiceNow 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 ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and ServiceNow.
Diversification Opportunities for Eldorado Gold and ServiceNow
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eldorado and ServiceNow is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow 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 ServiceNow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServiceNow has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and ServiceNow go up and down completely randomly.
Pair Corralation between Eldorado Gold and ServiceNow
Considering the 90-day investment horizon Eldorado Gold is expected to generate 1.26 times less return on investment than ServiceNow. In addition to that, Eldorado Gold is 1.22 times more volatile than ServiceNow. It trades about 0.06 of its total potential returns per unit of risk. ServiceNow is currently generating about 0.1 per unit of volatility. If you would invest 54,635 in ServiceNow on September 4, 2024 and sell it today you would earn a total of 50,208 from holding ServiceNow or generate 91.9% 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. ServiceNow
Performance |
| Timeline |
| Eldorado Gold Corp |
| ServiceNow |
Eldorado Gold and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and ServiceNow
The main advantage of trading using opposite Eldorado Gold and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, ServiceNow 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 ServiceNow will offset losses from the drop in ServiceNow's long position.| Eldorado Gold vs. Constellium Nv | Eldorado Gold vs. Century Aluminum | Eldorado Gold vs. China Hongqiao Group | Eldorado Gold vs. Kaiser Aluminum |
| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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