Correlation Between Eldorado Gold and GigCapital7 Corp

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and GigCapital7 Corp 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 GigCapital7 Corp 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 GigCapital7 Corp Class, you can compare the effects of market volatilities on Eldorado Gold and GigCapital7 Corp 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 GigCapital7 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and GigCapital7 Corp.

Diversification Opportunities for Eldorado Gold and GigCapital7 Corp

-0.08

Correlation Coefficient

Eldorado Gold  GigCapital7 Corp

Good diversification

The 3 months correlation between Eldorado and GigCapital7 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and GigCapital7 Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigCapital7 Corp Class 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 GigCapital7 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigCapital7 Corp Class has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and GigCapital7 Corp go up and down completely randomly.

Pair Corralation between Eldorado Gold and GigCapital7 Corp

Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 28.82 times more return on investment than GigCapital7 Corp. However, Eldorado Gold is 28.82 times more volatile than GigCapital7 Corp Class. It trades about 0.04 of its potential returns per unit of risk. GigCapital7 Corp Class is currently generating about 0.24 per unit of risk. If you would invest  1,518  in Eldorado Gold Corp on December 21, 2024 and sell it today you would earn a total of  77.00  from holding Eldorado Gold Corp or generate 5.07% 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.  GigCapital7 Corp Class

Eldorado Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eldorado Gold Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Eldorado Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GigCapital7 Corp Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GigCapital7 Corp Class are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, GigCapital7 Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eldorado Gold and GigCapital7 Corp

The main advantage of trading using opposite Eldorado Gold and GigCapital7 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, GigCapital7 Corp 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 GigCapital7 Corp will offset losses from the drop in GigCapital7 Corp's long position.

The idea behind Eldorado Gold Corp and GigCapital7 Corp Class 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.