Correlation Between Noble Plc and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Noble Plc 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 Noble Plc and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and Eldorado Gold Corp, you can compare the effects of market volatilities on Noble Plc 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 Noble Plc with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Eldorado Gold.
Diversification Opportunities for Noble Plc and Eldorado Gold
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Noble and Eldorado is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc 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 Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and Eldorado Gold go up and down completely randomly.
Pair Corralation between Noble Plc and Eldorado Gold
Allowing for the 90-day total investment horizon Noble plc is expected to under-perform the Eldorado Gold. In addition to that, Noble Plc is 1.0 times more volatile than Eldorado Gold Corp. It trades about -0.03 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.0 per unit of volatility. If you would invest 1,635 in Eldorado Gold Corp on September 2, 2024 and sell it today you would lose (35.00) from holding Eldorado Gold Corp or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble plc vs. Eldorado Gold Corp
Performance |
| Timeline |
| Noble plc |
| Eldorado Gold Corp |
Noble Plc and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and Eldorado Gold
The main advantage of trading using opposite Noble Plc and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc 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.| Noble Plc vs. Seadrill Limited | Noble Plc vs. Borr Drilling | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Transocean |
| 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 Positions Ratings module to 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.
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