Correlation Between Eldorado Gold and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Bridgford Foods 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 Bridgford Foods 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 Bridgford Foods, you can compare the effects of market volatilities on Eldorado Gold and Bridgford Foods 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 Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Bridgford Foods.
Diversification Opportunities for Eldorado Gold and Bridgford Foods
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eldorado and Bridgford is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods 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 Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Bridgford Foods go up and down completely randomly.
Pair Corralation between Eldorado Gold and Bridgford Foods
Considering the 90-day investment horizon Eldorado Gold is expected to generate 1.35 times less return on investment than Bridgford Foods. But when comparing it to its historical volatility, Eldorado Gold Corp is 1.01 times less risky than Bridgford Foods. It trades about 0.24 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 879.00 in Bridgford Foods on September 13, 2024 and sell it today you would earn a total of 149.00 from holding Bridgford Foods or generate 16.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eldorado Gold Corp vs. Bridgford Foods
Performance |
Timeline |
Eldorado Gold Corp |
Bridgford Foods |
Eldorado Gold and Bridgford Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eldorado Gold and Bridgford Foods
The main advantage of trading using opposite Eldorado Gold and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Bridgford Foods 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 Bridgford Foods will offset losses from the drop in Bridgford Foods' long position.Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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