Correlation Between Arizona Sonoran and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Arizona Sonoran 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 Arizona Sonoran and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arizona Sonoran Copper and Eldorado Gold Corp, you can compare the effects of market volatilities on Arizona Sonoran 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 Arizona Sonoran with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Sonoran and Eldorado Gold.
Diversification Opportunities for Arizona Sonoran and Eldorado Gold
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arizona and Eldorado is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Sonoran Copper 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 Arizona Sonoran 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 Arizona Sonoran Copper 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 Arizona Sonoran i.e., Arizona Sonoran and Eldorado Gold go up and down completely randomly.
Pair Corralation between Arizona Sonoran and Eldorado Gold
Assuming the 90 days trading horizon Arizona Sonoran Copper is expected to under-perform the Eldorado Gold. In addition to that, Arizona Sonoran is 1.45 times more volatile than Eldorado Gold Corp. It trades about 0.0 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.06 per unit of volatility. If you would invest 1,196 in Eldorado Gold Corp on September 25, 2024 and sell it today you would earn a total of 986.00 from holding Eldorado Gold Corp or generate 82.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Arizona Sonoran Copper vs. Eldorado Gold Corp
Performance |
Timeline |
Arizona Sonoran Copper |
Eldorado Gold Corp |
Arizona Sonoran and Eldorado Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arizona Sonoran and Eldorado Gold
The main advantage of trading using opposite Arizona Sonoran and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona Sonoran 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.Arizona Sonoran vs. Wildsky Resources | Arizona Sonoran vs. Q Gold Resources | Arizona Sonoran vs. Plato Gold Corp | Arizona Sonoran vs. MAS Gold Corp |
Eldorado Gold vs. Wildsky Resources | Eldorado Gold vs. Q Gold Resources | Eldorado Gold vs. Plato Gold Corp | Eldorado Gold vs. MAS Gold Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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