Correlation Between Eminent Gold and Eramet SA
Can any of the company-specific risk be diversified away by investing in both Eminent Gold and Eramet 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 Eminent Gold and Eramet SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eminent Gold Corp and Eramet SA ADR, you can compare the effects of market volatilities on Eminent Gold and Eramet 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 Eminent Gold with a short position of Eramet SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eminent Gold and Eramet SA.
Diversification Opportunities for Eminent Gold and Eramet SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eminent and Eramet is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eminent Gold Corp and Eramet SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eramet SA ADR and Eminent 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 Eminent Gold Corp are associated (or correlated) with Eramet SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eramet SA ADR has no effect on the direction of Eminent Gold i.e., Eminent Gold and Eramet SA go up and down completely randomly.
Pair Corralation between Eminent Gold and Eramet SA
Assuming the 90 days horizon Eminent Gold Corp is expected to under-perform the Eramet SA. In addition to that, Eminent Gold is 1.33 times more volatile than Eramet SA ADR. It trades about -0.36 of its total potential returns per unit of risk. Eramet SA ADR is currently generating about -0.25 per unit of volatility. If you would invest 612.00 in Eramet SA ADR on September 3, 2024 and sell it today you would lose (92.00) from holding Eramet SA ADR or give up 15.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eminent Gold Corp vs. Eramet SA ADR
Performance |
| Timeline |
| Eminent Gold Corp |
| Eramet SA ADR |
Eminent Gold and Eramet SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eminent Gold and Eramet SA
The main advantage of trading using opposite Eminent Gold and Eramet SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eminent Gold position performs unexpectedly, Eramet 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 Eramet SA will offset losses from the drop in Eramet SA's long position.| Eminent Gold vs. Qubec Nickel Corp | Eminent Gold vs. IGO Limited | Eminent Gold vs. Avarone Metals | Eminent Gold vs. Adriatic Metals PLC |
| Eramet SA vs. Qubec Nickel Corp | Eramet SA vs. IGO Limited | Eramet SA vs. Avarone Metals | Eramet SA vs. Adriatic Metals PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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