Correlation Between Eldorado Gold and Richtech Robotics

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

Diversification Opportunities for Eldorado Gold and Richtech Robotics

-0.58

Correlation Coefficient

Eldorado Gold  Richtech Robotics

Excellent diversification

The 3 months correlation between Eldorado and Richtech is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics 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 Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Richtech Robotics go up and down completely randomly.

Pair Corralation between Eldorado Gold and Richtech Robotics

Considering the 90-day investment horizon Eldorado Gold is expected to generate 12036.0 times less return on investment than Richtech Robotics. But when comparing it to its historical volatility, Eldorado Gold Corp is 7.79 times less risky than Richtech Robotics. It trades about 0.0 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Richtech Robotics Class on October 26, 2024 and sell it today you would earn a total of  314.00  from holding Richtech Robotics Class or generate 498.41% return on investment over 90 days.

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

Eldorado Gold Corp  vs.  Richtech Robotics Class

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 latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Richtech Robotics Class

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Richtech Robotics

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

The idea behind Eldorado Gold Corp and Richtech Robotics 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.