Correlation Between Sable Offshore and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Sable Offshore 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 Sable Offshore and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sable Offshore Corp and Eldorado Gold Corp, you can compare the effects of market volatilities on Sable Offshore 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 Sable Offshore with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Eldorado Gold.
Diversification Opportunities for Sable Offshore and Eldorado Gold
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sable and Eldorado is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp 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 Sable Offshore 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 Sable Offshore Corp 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 Sable Offshore i.e., Sable Offshore and Eldorado Gold go up and down completely randomly.
Pair Corralation between Sable Offshore and Eldorado Gold
Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the Eldorado Gold. In addition to that, Sable Offshore is 1.48 times more volatile than Eldorado Gold Corp. It trades about -0.06 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 1,646 in Eldorado Gold Corp on September 4, 2024 and sell it today you would lose (67.00) from holding Eldorado Gold Corp or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Eldorado Gold Corp
Performance |
| Timeline |
| Sable Offshore Corp |
| Eldorado Gold Corp |
Sable Offshore and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Eldorado Gold
The main advantage of trading using opposite Sable Offshore and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore 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.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| Eldorado Gold vs. Constellium Nv | Eldorado Gold vs. Century Aluminum | Eldorado Gold vs. China Hongqiao Group | Eldorado Gold vs. Kaiser Aluminum |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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