Correlation Between Eldorado Gold and Zoomcar Holdings

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

Diversification Opportunities for Eldorado Gold and Zoomcar Holdings

-0.33

Correlation Coefficient

Eldorado Gold  Zoomcar Holdings

Very good diversification

The 3 months correlation between Eldorado and Zoomcar is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Zoomcar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomcar Holdings 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 Zoomcar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomcar Holdings has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Zoomcar Holdings go up and down completely randomly.

Pair Corralation between Eldorado Gold and Zoomcar Holdings

Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Zoomcar Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 11.06 times less risky than Zoomcar Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Zoomcar Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.63  in Zoomcar Holdings on September 15, 2024 and sell it today you would lose (0.38) from holding Zoomcar Holdings or give up 23.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Eldorado Gold Corp  vs.  Zoomcar Holdings

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.

Zoomcar Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zoomcar Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Zoomcar Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldorado Gold and Zoomcar Holdings

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

The idea behind Eldorado Gold Corp and Zoomcar Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.