Correlation Between NESNVX and Eldorado Gold

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

By analyzing existing cross correlation between NESNVX 25 14 SEP 41 and Eldorado Gold Corp, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Eldorado Gold.

Diversification Opportunities for NESNVX and Eldorado Gold

-0.26

Correlation Coefficient

NESNVX  Eldorado Gold

Very good diversification

The 3 months correlation between NESNVX and Eldorado is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 25 14 SEP 41 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 NESNVX 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 NESNVX 25 14 SEP 41 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 NESNVX i.e., NESNVX and Eldorado Gold go up and down completely randomly.

Pair Corralation between NESNVX and Eldorado Gold

Assuming the 90 days trading horizon NESNVX 25 14 SEP 41 is expected to under-perform the Eldorado Gold. In addition to that, NESNVX is 1.27 times more volatile than Eldorado Gold Corp. It trades about 0.0 of its total potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.06 per unit of volatility. If you would invest  873.00  in Eldorado Gold Corp on September 29, 2024 and sell it today you would earn a total of  624.00  from holding Eldorado Gold Corp or generate 71.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.99%
Values	Daily Returns

NESNVX 25 14 SEP 41  vs.  Eldorado Gold Corp

NESNVX 25 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 25 14 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 25 14 SEP 41 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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NESNVX and Eldorado Gold

The main advantage of trading using opposite NESNVX and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 25 14 SEP 41 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.