Correlation Between Eldorado Gold and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on Eldorado Gold and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Software Acquisition.
Diversification Opportunities for Eldorado Gold and Software Acquisition
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and Software is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Software Acquisition go up and down completely randomly.
Pair Corralation between Eldorado Gold and Software Acquisition
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Software Acquisition. In addition to that, Eldorado Gold is 1.44 times more volatile than Software Acquisition Group. It trades about -0.11 of its total potential returns per unit of risk. Software Acquisition Group is currently generating about 0.03 per unit of volatility. If you would invest 111.00 in Software Acquisition Group on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Software Acquisition Group or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Software Acquisition Group
Performance |
| Timeline |
| Eldorado Gold Corp |
| Software Acquisition |
Eldorado Gold and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Software Acquisition
The main advantage of trading using opposite Eldorado Gold and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Software Acquisition vs. Getty Images Holdings | Software Acquisition vs. Zhihu Inc ADR | Software Acquisition vs. Catalyst Pharmaceuticals | Software Acquisition vs. Inhibrx |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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