Correlation Between Eldorado Gold and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Titan Machinery 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 Titan Machinery 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 Titan Machinery, you can compare the effects of market volatilities on Eldorado Gold and Titan Machinery 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 Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Titan Machinery.
Diversification Opportunities for Eldorado Gold and Titan Machinery
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and Titan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Titan Machinery go up and down completely randomly.
Pair Corralation between Eldorado Gold and Titan Machinery
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Titan Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 1.53 times less risky than Titan Machinery. The stock trades about -0.04 of its potential returns per unit of risk. The Titan Machinery is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Titan Machinery on September 3, 2024 and sell it today you would earn a total of 164.00 from holding Titan Machinery or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Titan Machinery
Performance |
| Timeline |
| Eldorado Gold Corp |
| Titan Machinery |
Eldorado Gold and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Titan Machinery
The main advantage of trading using opposite Eldorado Gold and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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