Correlation Between Jeld Wen and Eldorado Gold

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

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

Diversification Opportunities for Jeld Wen and Eldorado Gold

0.14

Correlation Coefficient

Jeld Wen  Eldorado Gold

Average diversification

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

Pair Corralation between Jeld Wen and Eldorado Gold

Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Eldorado Gold. In addition to that, Jeld Wen is 1.49 times more volatile than Eldorado Gold Corp. It trades about -0.07 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  1,470  in Eldorado Gold Corp on December 28, 2024 and sell it today you would earn a total of  197.00  from holding Eldorado Gold Corp or generate 13.4% return on investment over 90 days.

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

Jeld Wen Holding  vs.  Eldorado Gold Corp

Jeld Wen Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jeld Wen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Jeld Wen and Eldorado Gold

The main advantage of trading using opposite Jeld Wen and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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 Jeld Wen Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.