Correlation Between Equinox Gold and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Wesdome 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 Equinox Gold and Wesdome Gold 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 Wesdome Gold Mines, you can compare the effects of market volatilities on Equinox Gold and Wesdome 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 Equinox Gold with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Wesdome Gold.
Diversification Opportunities for Equinox Gold and Wesdome Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equinox and Wesdome is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Equinox Gold i.e., Equinox Gold and Wesdome Gold go up and down completely randomly.
Pair Corralation between Equinox Gold and Wesdome Gold
Assuming the 90 days trading horizon Equinox Gold Corp is expected to generate 1.31 times more return on investment than Wesdome Gold. However, Equinox Gold is 1.31 times more volatile than Wesdome Gold Mines. It trades about 0.0 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.11 per unit of risk. If you would invest 813.00 in Equinox Gold Corp on August 25, 2024 and sell it today you would lose (13.00) from holding Equinox Gold Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Wesdome Gold Mines
Performance |
| Timeline |
| Equinox Gold Corp |
| Wesdome Gold Mines |
Equinox Gold and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Wesdome Gold
The main advantage of trading using opposite Equinox Gold and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver | Equinox Gold vs. SSR Mining | Equinox Gold vs. SilverCrest Metals |
| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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