Correlation Between MusclePharm and Eldorado Gold

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

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

Diversification Opportunities for MusclePharm and Eldorado Gold

0.0

Correlation Coefficient

MusclePharm  Eldorado Gold

Pay attention - limited upside

The 3 months correlation between MusclePharm and Eldorado is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MusclePharm 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 MusclePharm 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 MusclePharm 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 MusclePharm i.e., MusclePharm and Eldorado Gold go up and down completely randomly.

Pair Corralation between MusclePharm and Eldorado Gold

If you would invest  1,518  in Eldorado Gold Corp on December 22, 2024 and sell it today you would earn a total of  46.00  from holding Eldorado Gold Corp or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MusclePharm  vs.  Eldorado Gold Corp

MusclePharm

Risk-Adjusted Performance

Very Weak

Over the last 90 days MusclePharm has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MusclePharm is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Eldorado Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eldorado Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 MusclePharm and Eldorado Gold

The main advantage of trading using opposite MusclePharm and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MusclePharm 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 MusclePharm 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.