Correlation Between Yuexiu Transport and Eldorado Gold

Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Eldorado 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 Yuexiu Transport and Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuexiu Transport Infrastructure and Eldorado Gold Corp, you can compare the effects of market volatilities on Yuexiu Transport and Eldorado 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 Yuexiu Transport with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Eldorado Gold.

Diversification Opportunities for Yuexiu Transport and Eldorado Gold

0.0

Correlation Coefficient

Yuexiu Transport  Eldorado Gold

Pay attention - limited upside

The 3 months correlation between Yuexiu and Eldorado is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Eldorado Gold go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Eldorado Gold

If you would invest  1,470  in Eldorado Gold Corp on December 28, 2024 and sell it today you would earn a total of  207.00  from holding Eldorado Gold Corp or generate 14.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Yuexiu Transport Infrastructur  vs.  Eldorado Gold Corp

Yuexiu Transport Inf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yuexiu Transport Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Yuexiu Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Eldorado Gold Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eldorado Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Eldorado Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and Eldorado Gold

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

The idea behind Yuexiu Transport Infrastructure and Eldorado Gold Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.