Correlation Between Ivanhoe Mines and Eldorado Gold

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

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

Diversification Opportunities for Ivanhoe Mines and Eldorado Gold

0.14

Correlation Coefficient

Ivanhoe Mines  Eldorado Gold

Average diversification

The 3 months correlation between Ivanhoe and Eldorado is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines 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 Ivanhoe Mines 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 Ivanhoe Mines 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 Ivanhoe Mines i.e., Ivanhoe Mines and Eldorado Gold go up and down completely randomly.

Pair Corralation between Ivanhoe Mines and Eldorado Gold

Assuming the 90 days trading horizon Ivanhoe Mines is expected to under-perform the Eldorado Gold. In addition to that, Ivanhoe Mines is 1.23 times more volatile than Eldorado Gold Corp. It trades about -0.09 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.08 per unit of volatility. If you would invest  2,138  in Eldorado Gold Corp on December 31, 2024 and sell it today you would earn a total of  260.00  from holding Eldorado Gold Corp or generate 12.16% return on investment over 90 days.

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

Ivanhoe Mines  vs.  Eldorado Gold Corp

Ivanhoe Mines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Eldorado Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivanhoe Mines and Eldorado Gold

The main advantage of trading using opposite Ivanhoe Mines and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines 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 Ivanhoe Mines 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..