Correlation Between Univest Pennsylvania and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania 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 Univest Pennsylvania and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Eldorado Gold Corp, you can compare the effects of market volatilities on Univest Pennsylvania 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 Univest Pennsylvania with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Eldorado Gold.
Diversification Opportunities for Univest Pennsylvania and Eldorado Gold
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Univest and Eldorado is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania i.e., Univest Pennsylvania and Eldorado Gold go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Eldorado Gold
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 0.85 times more return on investment than Eldorado Gold. However, Univest Pennsylvania is 1.18 times less risky than Eldorado Gold. It trades about 0.09 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.06 per unit of risk. If you would invest 1,836 in Univest Pennsylvania on September 12, 2024 and sell it today you would earn a total of 1,322 from holding Univest Pennsylvania or generate 72.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Eldorado Gold Corp
Performance |
| Timeline |
| Univest Pennsylvania |
| Eldorado Gold Corp |
Univest Pennsylvania and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Eldorado Gold
The main advantage of trading using opposite Univest Pennsylvania and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania 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.| Univest Pennsylvania vs. JPMorgan Chase Co | Univest Pennsylvania vs. Citigroup | Univest Pennsylvania vs. Wells Fargo | Univest Pennsylvania vs. Toronto Dominion Bank |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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