Correlation Between Equinox Gold and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Perseus Mining 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 Equinox Gold and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinox Gold Corp and Perseus Mining Limited, you can compare the effects of market volatilities on Equinox Gold and Perseus Mining 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 Equinox Gold with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Perseus Mining.
Diversification Opportunities for Equinox Gold and Perseus Mining
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Equinox and Perseus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Equinox 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 Equinox Gold Corp are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Equinox Gold i.e., Equinox Gold and Perseus Mining go up and down completely randomly.
Pair Corralation between Equinox Gold and Perseus Mining
Assuming the 90 days trading horizon Equinox Gold Corp is expected to generate 2.32 times more return on investment than Perseus Mining. However, Equinox Gold is 2.32 times more volatile than Perseus Mining Limited. It trades about -0.07 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.24 per unit of risk. If you would invest 600.00 in Equinox Gold Corp on October 12, 2024 and sell it today you would lose (40.00) from holding Equinox Gold Corp or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Equinox Gold Corp vs. Perseus Mining Limited
Performance |
| Timeline |
| Equinox Gold Corp |
| Perseus Mining |
Equinox Gold and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Perseus Mining
The main advantage of trading using opposite Equinox Gold and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Equinox Gold vs. Perseus Mining Limited | Equinox Gold vs. Jacquet Metal Service | Equinox Gold vs. The Home Depot | Equinox Gold vs. DFS Furniture PLC |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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