Correlation Between Eldorado Gold and Willamette Valley

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

Diversification Opportunities for Eldorado Gold and Willamette Valley

0.19

Correlation Coefficient

Eldorado Gold  Willamette Valley

Average diversification

The 3 months correlation between Eldorado and Willamette is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Willamette Valley go up and down completely randomly.

Pair Corralation between Eldorado Gold and Willamette Valley

Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Willamette Valley. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 1.19 times less risky than Willamette Valley. The stock trades about -0.14 of its potential returns per unit of risk. The Willamette Valley Vineyards is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Willamette Valley Vineyards on October 20, 2024 and sell it today you would earn a total of  124.00  from holding Willamette Valley Vineyards or generate 35.84% return on investment over 90 days.

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

Eldorado Gold Corp  vs.  Willamette Valley Vineyards

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Willamette Valley

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Willamette Valley demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Willamette Valley

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

The idea behind Eldorado Gold Corp and Willamette Valley Vineyards 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.