Correlation Between Eldorado Gold and DIAGEO
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By analyzing existing cross correlation between Eldorado Gold Corp and DIAGEO CAPITAL PLC, you can compare the effects of market volatilities on Eldorado Gold and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and DIAGEO.
Diversification Opportunities for Eldorado Gold and DIAGEO
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eldorado and DIAGEO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and DIAGEO CAPITAL PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAPITAL PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAPITAL PLC has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and DIAGEO go up and down completely randomly.
Pair Corralation between Eldorado Gold and DIAGEO
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 2.2 times more return on investment than DIAGEO. However, Eldorado Gold is 2.2 times more volatile than DIAGEO CAPITAL PLC. It trades about -0.01 of its potential returns per unit of risk. DIAGEO CAPITAL PLC is currently generating about -0.15 per unit of risk. If you would invest 1,779 in Eldorado Gold Corp on September 12, 2024 and sell it today you would lose (58.50) from holding Eldorado Gold Corp or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.5% |
| Values | Daily Returns |
Eldorado Gold Corp vs. DIAGEO CAPITAL PLC
Performance |
| Timeline |
| Eldorado Gold Corp |
| DIAGEO CAPITAL PLC |
Eldorado Gold and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and DIAGEO
The main advantage of trading using opposite Eldorado Gold and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| DIAGEO vs. Enersys | DIAGEO vs. Sabre Corpo | DIAGEO vs. Grocery Outlet Holding | DIAGEO vs. Cedar Realty Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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