Correlation Between Eldorado Gold and GEN Restaurant

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

Diversification Opportunities for Eldorado Gold and GEN Restaurant

0.79

Correlation Coefficient

Eldorado Gold  GEN Restaurant

Poor diversification

The 3 months correlation between Eldorado and GEN is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and GEN Restaurant go up and down completely randomly.

Pair Corralation between Eldorado Gold and GEN Restaurant

Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 0.68 times more return on investment than GEN Restaurant. However, Eldorado Gold Corp is 1.47 times less risky than GEN Restaurant. It trades about 0.03 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.05 per unit of risk. If you would invest  1,517  in Eldorado Gold Corp on December 18, 2024 and sell it today you would earn a total of  32.00  from holding Eldorado Gold Corp or generate 2.11% return on investment over 90 days.

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

Eldorado Gold Corp  vs.  GEN Restaurant Group,

Eldorado Gold Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eldorado Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Eldorado Gold is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Eldorado Gold and GEN Restaurant

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

The idea behind Eldorado Gold Corp and GEN Restaurant Group, 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.