Correlation Between Global Ship and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Global Ship and Equinox 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 Global Ship and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Equinox Gold Corp, you can compare the effects of market volatilities on Global Ship and Equinox 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 Global Ship with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Equinox Gold.
Diversification Opportunities for Global Ship and Equinox Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Equinox is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Equinox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Gold Corp and Global Ship 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 Global Ship Lease are associated (or correlated) with Equinox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Gold Corp has no effect on the direction of Global Ship i.e., Global Ship and Equinox Gold go up and down completely randomly.
Pair Corralation between Global Ship and Equinox Gold
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Equinox Gold. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 2.99 times less risky than Equinox Gold. The stock trades about -0.27 of its potential returns per unit of risk. The Equinox Gold Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 485.00 in Equinox Gold Corp on September 15, 2024 and sell it today you would earn a total of 66.00 from holding Equinox Gold Corp or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Equinox Gold Corp
Performance |
| Timeline |
| Global Ship Lease |
| Equinox Gold Corp |
Global Ship and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Equinox Gold
The main advantage of trading using opposite Global Ship and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Equinox 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 Equinox Gold will offset losses from the drop in Equinox Gold's long position.| Global Ship vs. SPARTAN STORES | Global Ship vs. Consolidated Communications Holdings | Global Ship vs. Zoom Video Communications | Global Ship vs. RETAIL FOOD GROUP |
| Equinox Gold vs. Global Ship Lease | Equinox Gold vs. Singapore Telecommunications Limited | Equinox Gold vs. Astral Foods Limited | Equinox Gold vs. Cogent Communications Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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