Correlation Between Eldorado Gold and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Sapiens International 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 Sapiens International 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 Sapiens International, you can compare the effects of market volatilities on Eldorado Gold and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Sapiens International.
Diversification Opportunities for Eldorado Gold and Sapiens International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eldorado and Sapiens is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Sapiens International go up and down completely randomly.
Pair Corralation between Eldorado Gold and Sapiens International
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 0.43 times more return on investment than Sapiens International. However, Eldorado Gold Corp is 2.34 times less risky than Sapiens International. It trades about -0.06 of its potential returns per unit of risk. Sapiens International is currently generating about -0.21 per unit of risk. If you would invest 1,646 in Eldorado Gold Corp on September 4, 2024 and sell it today you would lose (67.00) from holding Eldorado Gold Corp or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Sapiens International
Performance |
| Timeline |
| Eldorado Gold Corp |
| Sapiens International |
Eldorado Gold and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Sapiens International
The main advantage of trading using opposite Eldorado Gold and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| Eldorado Gold vs. Constellium Nv | Eldorado Gold vs. Century Aluminum | Eldorado Gold vs. China Hongqiao Group | Eldorado Gold vs. Kaiser Aluminum |
| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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