Correlation Between Eldorado Gold and Meiwu Technology

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Meiwu Technology 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 Meiwu Technology 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 Meiwu Technology Co, you can compare the effects of market volatilities on Eldorado Gold and Meiwu Technology 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 Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Meiwu Technology.

Diversification Opportunities for Eldorado Gold and Meiwu Technology

-0.27

Correlation Coefficient

Eldorado Gold  Meiwu Technology

Very good diversification

The 3 months correlation between Eldorado and Meiwu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Meiwu Technology go up and down completely randomly.

Pair Corralation between Eldorado Gold and Meiwu Technology

Considering the 90-day investment horizon Eldorado Gold is expected to generate 1.89 times less return on investment than Meiwu Technology. But when comparing it to its historical volatility, Eldorado Gold Corp is 3.91 times less risky than Meiwu Technology. It trades about 0.07 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Meiwu Technology Co on September 14, 2024 and sell it today you would lose (145.00) from holding Meiwu Technology Co or give up 47.54% of portfolio value over 90 days.

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

Eldorado Gold Corp  vs.  Meiwu Technology Co

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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Meiwu Technology

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Meiwu Technology

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

The idea behind Eldorado Gold Corp and Meiwu Technology Co 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.