Correlation Between Eldorado Gold and UOBSP

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and UOBSP 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 UOBSP 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 UOBSP 3863 07 OCT 32, you can compare the effects of market volatilities on Eldorado Gold and UOBSP 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 UOBSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and UOBSP.

Diversification Opportunities for Eldorado Gold and UOBSP

-0.73

Correlation Coefficient

Eldorado Gold  UOBSP

Pay attention - limited upside

The 3 months correlation between Eldorado and UOBSP is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and UOBSP 3863 07 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOBSP 3863 07 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 UOBSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOBSP 3863 07 has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and UOBSP go up and down completely randomly.

Pair Corralation between Eldorado Gold and UOBSP

Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the UOBSP. In addition to that, Eldorado Gold is 9.2 times more volatile than UOBSP 3863 07 OCT 32. It trades about -0.05 of its total potential returns per unit of risk. UOBSP 3863 07 OCT 32 is currently generating about -0.2 per unit of volatility. If you would invest  9,786  in UOBSP 3863 07 OCT 32 on September 15, 2024 and sell it today you would lose (96.00) from holding UOBSP 3863 07 OCT 32 or give up 0.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.13%
Values	Daily Returns

Eldorado Gold Corp  vs.  UOBSP 3863 07 OCT 32

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 unfluctuating 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.

UOBSP 3863 07

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UOBSP 3863 07 OCT 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UOBSP 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 UOBSP

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

The idea behind Eldorado Gold Corp and UOBSP 3863 07 OCT 32 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.