Correlation Between Eldorado Gold and Airship AI

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

Diversification Opportunities for Eldorado Gold and Airship AI

-0.71

Correlation Coefficient

Eldorado Gold  Airship AI

Pay attention - limited upside

The 3 months correlation between Eldorado and Airship is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Airship AI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airship AI Holdings 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 Airship AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airship AI Holdings has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Airship AI go up and down completely randomly.

Pair Corralation between Eldorado Gold and Airship AI

Considering the 90-day investment horizon Eldorado Gold is expected to generate 2.52 times less return on investment than Airship AI. But when comparing it to its historical volatility, Eldorado Gold Corp is 4.91 times less risky than Airship AI. It trades about 0.06 of its potential returns per unit of risk. Airship AI Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,008  in Airship AI Holdings on September 26, 2024 and sell it today you would lose (454.00) from holding Airship AI Holdings or give up 45.04% of portfolio value over 90 days.

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

Eldorado Gold Corp  vs.  Airship AI Holdings

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Airship AI Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Airship AI Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Airship AI reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Airship AI

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

The idea behind Eldorado Gold Corp and Airship AI Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.