Correlation Between Idaho Strategic and Eldorado Gold

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

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

Diversification Opportunities for Idaho Strategic and Eldorado Gold

0.91

Correlation Coefficient

Idaho Strategic  Eldorado Gold

Almost no diversification

The 3 months correlation between Idaho and Eldorado is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Idaho Strategic Resources 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 Idaho Strategic 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 Idaho Strategic Resources 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 Idaho Strategic i.e., Idaho Strategic and Eldorado Gold go up and down completely randomly.

Pair Corralation between Idaho Strategic and Eldorado Gold

Considering the 90-day investment horizon Idaho Strategic Resources is expected to under-perform the Eldorado Gold. In addition to that, Idaho Strategic is 1.54 times more volatile than Eldorado Gold Corp. It trades about -0.12 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.03 per unit of volatility. If you would invest  1,620  in Eldorado Gold Corp on October 7, 2024 and sell it today you would lose (67.00) from holding Eldorado Gold Corp or give up 4.14% of portfolio value over 90 days.

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

Idaho Strategic Resources  vs.  Eldorado Gold Corp

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 very healthy technical and fundamental indicators, Eldorado Gold is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Idaho Strategic and Eldorado Gold

The main advantage of trading using opposite Idaho Strategic and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idaho Strategic 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 Idaho Strategic Resources 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.