Correlation Between Eldorado Gold and Western Sierra
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Western Sierra 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 Western Sierra 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 Western Sierra Mining, you can compare the effects of market volatilities on Eldorado Gold and Western Sierra 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 Western Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Western Sierra.
Diversification Opportunities for Eldorado Gold and Western Sierra
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eldorado and Western is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Western Sierra Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Sierra Mining 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 Western Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Sierra Mining has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Western Sierra go up and down completely randomly.
Pair Corralation between Eldorado Gold and Western Sierra
Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 2.04 times more return on investment than Western Sierra. However, Eldorado Gold is 2.04 times more volatile than Western Sierra Mining. It trades about -0.05 of its potential returns per unit of risk. Western Sierra Mining is currently generating about -0.17 per unit of risk. If you would invest 1,730 in Eldorado Gold Corp on August 29, 2024 and sell it today you would lose (160.00) from holding Eldorado Gold Corp or give up 9.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Western Sierra Mining
Performance |
| Timeline |
| Eldorado Gold Corp |
| Western Sierra Mining |
Eldorado Gold and Western Sierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Western Sierra
The main advantage of trading using opposite Eldorado Gold and Western Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Western Sierra 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 Western Sierra will offset losses from the drop in Western Sierra's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| Western Sierra vs. Green Cures Botanical | Western Sierra vs. Cann American Corp | Western Sierra vs. Rimrock Gold Corp | Western Sierra vs. Galexxy Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |