Correlation Between Equinox Gold and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Alamos 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 Alamos 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 Alamos Gold, you can compare the effects of market volatilities on Equinox Gold and Alamos 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 Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Alamos Gold.
Diversification Opportunities for Equinox Gold and Alamos Gold
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equinox and Alamos is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold 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 Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Equinox Gold i.e., Equinox Gold and Alamos Gold go up and down completely randomly.
Pair Corralation between Equinox Gold and Alamos Gold
Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 1.87 times more return on investment than Alamos Gold. However, Equinox Gold is 1.87 times more volatile than Alamos Gold. It trades about 0.25 of its potential returns per unit of risk. Alamos Gold is currently generating about 0.44 per unit of risk. If you would invest 580.00 in Equinox Gold Corp on November 9, 2024 and sell it today you would earn a total of 89.00 from holding Equinox Gold Corp or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Alamos Gold
Performance |
| Timeline |
| Equinox Gold Corp |
| Alamos Gold |
Equinox Gold and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Alamos Gold
The main advantage of trading using opposite Equinox Gold and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Equinox Gold vs. Coeur Mining | Equinox Gold vs. B2Gold Corp | Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver |
| Alamos Gold vs. Pan American Silver | Alamos Gold vs. Newmont Goldcorp Corp | Alamos Gold vs. Wheaton Precious Metals | Alamos Gold vs. Franco Nevada |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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