Correlation Between Eldorado Gold and Stepstone
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Eldorado Gold and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Stepstone.
Diversification Opportunities for Eldorado Gold and Stepstone
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eldorado and Stepstone is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Stepstone go up and down completely randomly.
Pair Corralation between Eldorado Gold and Stepstone
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Stepstone. In addition to that, Eldorado Gold is 1.11 times more volatile than Stepstone Group. It trades about -0.01 of its total potential returns per unit of risk. Stepstone Group is currently generating about 0.14 per unit of volatility. If you would invest 5,168 in Stepstone Group on September 12, 2024 and sell it today you would earn a total of 992.00 from holding Stepstone Group or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Stepstone Group
Performance |
| Timeline |
| Eldorado Gold Corp |
| Stepstone Group |
Eldorado Gold and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Stepstone
The main advantage of trading using opposite Eldorado Gold and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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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