Correlation Between 632525AU5 and Eldorado Gold

Can any of the company-specific risk be diversified away by investing in both 632525AU5 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 632525AU5 and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NAB 2332 21 AUG 30 and Eldorado Gold Corp, you can compare the effects of market volatilities on 632525AU5 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 632525AU5 with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 632525AU5 and Eldorado Gold.

Diversification Opportunities for 632525AU5 and Eldorado Gold

-0.02

Correlation Coefficient

632525AU5  Eldorado Gold

Good diversification

The 3 months correlation between 632525AU5 and Eldorado is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NAB 2332 21 AUG 30 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 632525AU5 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 NAB 2332 21 AUG 30 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 632525AU5 i.e., 632525AU5 and Eldorado Gold go up and down completely randomly.

Pair Corralation between 632525AU5 and Eldorado Gold

Assuming the 90 days trading horizon NAB 2332 21 AUG 30 is expected to under-perform the Eldorado Gold. But the bond apears to be less risky and, when comparing its historical volatility, NAB 2332 21 AUG 30 is 1.82 times less risky than Eldorado Gold. The bond trades about -0.17 of its potential returns per unit of risk. The Eldorado Gold Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,754  in Eldorado Gold Corp on September 21, 2024 and sell it today you would lose (235.00) from holding Eldorado Gold Corp or give up 13.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.25%
Values	Daily Returns

NAB 2332 21 AUG 30  vs.  Eldorado Gold Corp

NAB 2332 21

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAB 2332 21 AUG 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NAB 2332 21 AUG 30 investors.

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.

Pair Trading with 632525AU5 and Eldorado Gold

The main advantage of trading using opposite 632525AU5 and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 632525AU5 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.

The idea behind NAB 2332 21 AUG 30 and Eldorado Gold Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.