Correlation Between Eldorado Gold and Oculis Holding

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Oculis Holding 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 Eldorado Gold and Oculis Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eldorado Gold Corp and Oculis Holding AG, you can compare the effects of market volatilities on Eldorado Gold and Oculis Holding 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 Eldorado Gold with a short position of Oculis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Oculis Holding.

Diversification Opportunities for Eldorado Gold and Oculis Holding

-0.17

Correlation Coefficient

Eldorado Gold  Oculis Holding

Good diversification

The 3 months correlation between Eldorado and Oculis is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Oculis Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculis Holding AG and Eldorado Gold 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 Eldorado Gold Corp are associated (or correlated) with Oculis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculis Holding AG has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Oculis Holding go up and down completely randomly.

Pair Corralation between Eldorado Gold and Oculis Holding

Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Oculis Holding. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 1.37 times less risky than Oculis Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Oculis Holding AG is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,200  in Oculis Holding AG on September 3, 2024 and sell it today you would earn a total of  404.00  from holding Oculis Holding AG or generate 33.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eldorado Gold Corp  vs.  Oculis Holding AG

Eldorado Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldorado Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Eldorado Gold is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Oculis Holding AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oculis Holding AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental indicators, Oculis Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Oculis Holding

The main advantage of trading using opposite Eldorado Gold and Oculis Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Oculis Holding 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 Oculis Holding will offset losses from the drop in Oculis Holding's long position.

The idea behind Eldorado Gold Corp and Oculis Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Transaction History module to view history of all your transactions and understand their impact on performance.