Correlation Between Eldorado Gold and Ternium SA
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Ternium SA 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 Ternium SA 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 Ternium SA ADR, you can compare the effects of market volatilities on Eldorado Gold and Ternium SA 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 Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Ternium SA.
Diversification Opportunities for Eldorado Gold and Ternium SA
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eldorado and Ternium is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Ternium SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA ADR 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 Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA ADR has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Ternium SA go up and down completely randomly.
Pair Corralation between Eldorado Gold and Ternium SA
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 1.9 times more return on investment than Ternium SA. However, Eldorado Gold is 1.9 times more volatile than Ternium SA ADR. It trades about 0.11 of its potential returns per unit of risk. Ternium SA ADR is currently generating about 0.12 per unit of risk. If you would invest 1,487 in Eldorado Gold Corp on November 1, 2024 and sell it today you would earn a total of 76.50 from holding Eldorado Gold Corp or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Ternium SA ADR
Performance |
| Timeline |
| Eldorado Gold Corp |
| Ternium SA ADR |
Eldorado Gold and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Ternium SA
The main advantage of trading using opposite Eldorado Gold and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Ternium SA 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 Ternium SA will offset losses from the drop in Ternium SA's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Ternium SA vs. Agnico Eagle Mines | Ternium SA vs. Pan American Silver | Ternium SA vs. Kinross Gold | Ternium SA vs. Newmont Goldcorp Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |