Correlation Between Equinox Gold and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on Equinox Gold and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and SilverCrest Metals.
Diversification Opportunities for Equinox Gold and SilverCrest Metals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equinox and SilverCrest is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Equinox Gold i.e., Equinox Gold and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Equinox Gold and SilverCrest Metals
Assuming the 90 days trading horizon Equinox Gold Corp is expected to generate 1.03 times more return on investment than SilverCrest Metals. However, Equinox Gold is 1.03 times more volatile than SilverCrest Metals. It trades about 0.19 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.11 per unit of risk. If you would invest 766.00 in Equinox Gold Corp on November 3, 2024 and sell it today you would earn a total of 111.00 from holding Equinox Gold Corp or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. SilverCrest Metals
Performance |
| Timeline |
| Equinox Gold Corp |
| SilverCrest Metals |
Equinox Gold and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and SilverCrest Metals
The main advantage of trading using opposite Equinox Gold and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver | Equinox Gold vs. SSR Mining | Equinox Gold vs. SilverCrest Metals |
| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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