Correlation Between Eldorado Gold and Q Gold

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

Diversification Opportunities for Eldorado Gold and Q Gold

0.48

Correlation Coefficient

Eldorado Gold  Q Gold

Very weak diversification

The 3 months correlation between Eldorado and QGR is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Q Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Gold Resources 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 Q Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Gold Resources has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Q Gold go up and down completely randomly.

Pair Corralation between Eldorado Gold and Q Gold

Assuming the 90 days trading horizon Eldorado Gold Corp is expected to under-perform the Q Gold. But the stock apears to be less risky and, when comparing its historical volatility, Eldorado Gold Corp is 3.55 times less risky than Q Gold. The stock trades about -0.06 of its potential returns per unit of risk. The Q Gold Resources is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Q Gold Resources on October 3, 2024 and sell it today you would lose (5.00) from holding Q Gold Resources or give up 26.32% of portfolio value over 90 days.

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

Eldorado Gold Corp  vs.  Q Gold Resources

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 fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Q Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Eldorado Gold and Q Gold

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

The idea behind Eldorado Gold Corp and Q Gold Resources 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.