Correlation Between Eldorado Gold and 191216CR9

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and 191216CR9 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 191216CR9 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 COCA COLA CO, you can compare the effects of market volatilities on Eldorado Gold and 191216CR9 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 191216CR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and 191216CR9.

Diversification Opportunities for Eldorado Gold and 191216CR9

-0.5

Correlation Coefficient

Eldorado Gold  191216CR9

Very good diversification

The 3 months correlation between Eldorado and 191216CR9 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and 191216CR9 go up and down completely randomly.

Pair Corralation between Eldorado Gold and 191216CR9

Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 18.3 times more return on investment than 191216CR9. However, Eldorado Gold is 18.3 times more volatile than COCA COLA CO. It trades about 0.04 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.06 per unit of risk. If you would invest  1,504  in Eldorado Gold Corp on December 24, 2024 and sell it today you would earn a total of  67.00  from holding Eldorado Gold Corp or generate 4.45% 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.  COCA COLA CO

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.

COCA A CO

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COCA COLA CO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 191216CR9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eldorado Gold and 191216CR9

The main advantage of trading using opposite Eldorado Gold and 191216CR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, 191216CR9 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 191216CR9 will offset losses from the drop in 191216CR9's long position.

The idea behind Eldorado Gold Corp and COCA COLA CO 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.