Correlation Between United Homes and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both United Homes 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 United Homes and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Homes Group and Eldorado Gold Corp, you can compare the effects of market volatilities on United Homes 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 United Homes with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and Eldorado Gold.
Diversification Opportunities for United Homes and Eldorado Gold
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Eldorado is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group 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 United Homes 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 United Homes Group 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 United Homes i.e., United Homes and Eldorado Gold go up and down completely randomly.
Pair Corralation between United Homes and Eldorado Gold
Considering the 90-day investment horizon United Homes Group is expected to under-perform the Eldorado Gold. In addition to that, United Homes is 1.68 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 0.04 per unit of volatility. If you would invest 1,319 in Eldorado Gold Corp on September 14, 2024 and sell it today you would earn a total of 272.00 from holding Eldorado Gold Corp or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Homes Group vs. Eldorado Gold Corp
Performance |
| Timeline |
| United Homes Group |
| Eldorado Gold Corp |
United Homes and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Homes and Eldorado Gold
The main advantage of trading using opposite United Homes and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes 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.| United Homes vs. Stepstone Group | United Homes vs. SEI Investments | United Homes vs. Morgan Stanley | United Homes vs. Aldel Financial II |
| Eldorado Gold vs. Fortitude Gold Corp | Eldorado Gold vs. New Gold | Eldorado Gold vs. Galiano Gold | Eldorado Gold vs. GoldMining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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