Correlation Between Eldorado Gold and New Gold
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and New Gold 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 New Gold 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 New Gold, you can compare the effects of market volatilities on Eldorado Gold and New Gold 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 New Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and New Gold.
Diversification Opportunities for Eldorado Gold and New Gold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eldorado and New is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and New Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Gold 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 New Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Gold has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and New Gold go up and down completely randomly.
Pair Corralation between Eldorado Gold and New Gold
Assuming the 90 days trading horizon Eldorado Gold Corp is expected to under-perform the New Gold. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 1.08 times less risky than New Gold. The stock trades about -0.11 of its potential returns per unit of risk. The New Gold is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 397.00 in New Gold on August 28, 2024 and sell it today you would lose (25.00) from holding New Gold or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. New Gold
Performance |
| Timeline |
| Eldorado Gold Corp |
| New Gold |
Eldorado Gold and New Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and New Gold
The main advantage of trading using opposite Eldorado Gold and New Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, New Gold 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 New Gold will offset losses from the drop in New Gold's long position.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold Corp | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Agnico Eagle Mines |
| New Gold vs. IAMGold | New Gold vs. Eldorado Gold Corp | New Gold vs. Alamos Gold | New Gold vs. NovaGold Resources |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |