Correlation Between Eldorado Gold and Oracle
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Oracle 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 Eldorado Gold and Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eldorado Gold Corp and Oracle, you can compare the effects of market volatilities on Eldorado Gold and Oracle 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 Eldorado Gold with a short position of Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Oracle.
Diversification Opportunities for Eldorado Gold and Oracle
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eldorado and Oracle is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle and Eldorado Gold 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 Eldorado Gold Corp are associated (or correlated) with Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Oracle go up and down completely randomly.
Pair Corralation between Eldorado Gold and Oracle
Considering the 90-day investment horizon Eldorado Gold is expected to generate 6.57 times less return on investment than Oracle. But when comparing it to its historical volatility, Eldorado Gold Corp is 1.07 times less risky than Oracle. It trades about 0.06 of its potential returns per unit of risk. Oracle is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 13,820 in Oracle on April 25, 2025 and sell it today you would earn a total of 10,486 from holding Oracle or generate 75.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eldorado Gold Corp vs. Oracle
Performance |
Timeline |
Eldorado Gold Corp |
Oracle |
Eldorado Gold and Oracle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eldorado Gold and Oracle
The main advantage of trading using opposite Eldorado Gold and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Oracle 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 Oracle will offset losses from the drop in Oracle's long position.Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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