Correlation Between NYSE Composite and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Eldorado Gold Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Eldorado Gold.
Diversification Opportunities for NYSE Composite and Eldorado Gold
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Eldorado is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Eldorado Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Eldorado Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.29 times more return on investment than Eldorado Gold. However, NYSE Composite is 3.45 times less risky than Eldorado Gold. It trades about 0.15 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 1,793,449 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 233,755 from holding NYSE Composite or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Eldorado Gold Corp
Performance |
| Timeline |
NYSE Composite and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Eldorado Gold Corp
Pair trading matchups for Eldorado Gold
Pair Trading with NYSE Composite and Eldorado Gold
The main advantage of trading using opposite NYSE Composite and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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