Correlation Between SCHMID Group and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both SCHMID Group 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 SCHMID Group and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCHMID Group NV and Eldorado Gold Corp, you can compare the effects of market volatilities on SCHMID Group 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 SCHMID Group with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Eldorado Gold.
Diversification Opportunities for SCHMID Group and Eldorado Gold
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCHMID and Eldorado is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV 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 SCHMID Group 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 SCHMID Group NV 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 SCHMID Group i.e., SCHMID Group and Eldorado Gold go up and down completely randomly.
Pair Corralation between SCHMID Group and Eldorado Gold
Assuming the 90 days horizon SCHMID Group NV is expected to generate 3.82 times more return on investment than Eldorado Gold. However, SCHMID Group is 3.82 times more volatile than Eldorado Gold Corp. It trades about 0.07 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.12 per unit of risk. If you would invest 25.00 in SCHMID Group NV on August 28, 2024 and sell it today you would earn a total of 1.00 from holding SCHMID Group NV or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
SCHMID Group NV vs. Eldorado Gold Corp
Performance |
| Timeline |
| SCHMID Group NV |
| Eldorado Gold Corp |
SCHMID Group and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCHMID Group and Eldorado Gold
The main advantage of trading using opposite SCHMID Group and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHMID Group 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.| SCHMID Group vs. Barnes Group | SCHMID Group vs. Babcock Wilcox Enterprises | SCHMID Group vs. Crane Company | SCHMID Group vs. Hillenbrand |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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