Correlation Between Eldorado Gold and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on Eldorado Gold and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Playtika Holding.
Diversification Opportunities for Eldorado Gold and Playtika Holding
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eldorado and Playtika is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Playtika Holding go up and down completely randomly.
Pair Corralation between Eldorado Gold and Playtika Holding
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Playtika Holding. In addition to that, Eldorado Gold is 2.92 times more volatile than Playtika Holding Corp. It trades about -0.11 of its total potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.33 per unit of volatility. If you would invest 791.00 in Playtika Holding Corp on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Playtika Holding Corp or generate 7.84% 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. Playtika Holding Corp
Performance |
| Timeline |
| Eldorado Gold Corp |
| Playtika Holding Corp |
Eldorado Gold and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Playtika Holding
The main advantage of trading using opposite Eldorado Gold and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.The idea behind Eldorado Gold Corp and Playtika Holding Corp 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.| Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |