Correlation Between Hannon Armstrong and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Eldorado 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 Hannon Armstrong and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannon Armstrong Sustainable and Eldorado Gold Corp, you can compare the effects of market volatilities on Hannon Armstrong and Eldorado 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 Hannon Armstrong with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Eldorado Gold.
Diversification Opportunities for Hannon Armstrong and Eldorado Gold
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannon and Eldorado is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp and Hannon Armstrong 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 Hannon Armstrong Sustainable are associated (or correlated) with Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Eldorado Gold go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Eldorado Gold
Given the investment horizon of 90 days Hannon Armstrong is expected to generate 1.47 times less return on investment than Eldorado Gold. In addition to that, Hannon Armstrong is 1.15 times more volatile than Eldorado Gold Corp. It trades about 0.04 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.06 per unit of volatility. If you would invest 1,280 in Eldorado Gold Corp on September 12, 2024 and sell it today you would earn a total of 444.00 from holding Eldorado Gold Corp or generate 34.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Eldorado Gold Corp
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Eldorado Gold Corp |
Hannon Armstrong and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Eldorado Gold
The main advantage of trading using opposite Hannon Armstrong and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Eldorado 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.| Hannon Armstrong vs. Iron Mountain Incorporated | Hannon Armstrong vs. Digital Realty Trust | Hannon Armstrong vs. SBA Communications Corp | Hannon Armstrong vs. Gaming Leisure Properties |
| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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