Correlation Between Montauk Renewables and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Montauk Renewables 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 Montauk Renewables and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montauk Renewables and Eldorado Gold Corp, you can compare the effects of market volatilities on Montauk Renewables 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 Montauk Renewables with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montauk Renewables and Eldorado Gold.
Diversification Opportunities for Montauk Renewables and Eldorado Gold
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Montauk and Eldorado is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Montauk Renewables 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 Montauk Renewables 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 Montauk Renewables 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 Montauk Renewables i.e., Montauk Renewables and Eldorado Gold go up and down completely randomly.
Pair Corralation between Montauk Renewables and Eldorado Gold
Given the investment horizon of 90 days Montauk Renewables is expected to under-perform the Eldorado Gold. In addition to that, Montauk Renewables is 2.07 times more volatile than Eldorado Gold Corp. It trades about -0.16 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.18 per unit of volatility. If you would invest 1,796 in Eldorado Gold Corp on August 31, 2024 and sell it today you would lose (208.00) from holding Eldorado Gold Corp or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montauk Renewables vs. Eldorado Gold Corp
Performance |
| Timeline |
| Montauk Renewables |
| Eldorado Gold Corp |
Montauk Renewables and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montauk Renewables and Eldorado Gold
The main advantage of trading using opposite Montauk Renewables and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montauk Renewables 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.| Montauk Renewables vs. Avista | Montauk Renewables vs. Allete Inc | Montauk Renewables vs. Black Hills | Montauk Renewables vs. Companhia Paranaense de |
| Eldorado Gold vs. Franco Nevada | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Seabridge Gold | Eldorado Gold vs. Osisko Gold Ro |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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