Correlation Between Alumis Common and Eldorado Gold

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

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

Diversification Opportunities for Alumis Common and Eldorado Gold

0.61

Correlation Coefficient

Alumis Common  Eldorado Gold

Poor diversification

The 3 months correlation between Alumis and Eldorado is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alumis Common Stock 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 Alumis Common 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 Alumis Common Stock 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 Alumis Common i.e., Alumis Common and Eldorado Gold go up and down completely randomly.

Pair Corralation between Alumis Common and Eldorado Gold

Given the investment horizon of 90 days Alumis Common Stock is expected to generate 1.73 times more return on investment than Eldorado Gold. However, Alumis Common is 1.73 times more volatile than Eldorado Gold Corp. It trades about -0.06 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.14 per unit of risk. If you would invest  861.00  in Alumis Common Stock on October 10, 2024 and sell it today you would lose (56.00) from holding Alumis Common Stock or give up 6.5% of portfolio value over 90 days.

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

Alumis Common Stock  vs.  Eldorado Gold Corp

Alumis Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alumis Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 fragile 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 Alumis Common and Eldorado Gold

The main advantage of trading using opposite Alumis Common and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumis Common 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 Alumis Common Stock 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.