Correlation Between Eldorado Gold and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Skechers USA 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 Skechers USA 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 Skechers USA, you can compare the effects of market volatilities on Eldorado Gold and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Skechers USA.
Diversification Opportunities for Eldorado Gold and Skechers USA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and Skechers is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Skechers USA go up and down completely randomly.
Pair Corralation between Eldorado Gold and Skechers USA
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 0.93 times more return on investment than Skechers USA. However, Eldorado Gold Corp is 1.07 times less risky than Skechers USA. It trades about -0.04 of its potential returns per unit of risk. Skechers USA is currently generating about -0.1 per unit of risk. If you would invest 1,451 in Eldorado Gold Corp on November 18, 2024 and sell it today you would lose (53.00) from holding Eldorado Gold Corp or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Skechers USA
Performance |
| Timeline |
| Eldorado Gold Corp |
| Skechers USA |
Eldorado Gold and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Skechers USA
The main advantage of trading using opposite Eldorado Gold and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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