Correlation Between Equinox Gold and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric, you can compare the effects of market volatilities on Equinox Gold and Ivanhoe Electric 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 Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Ivanhoe Electric.
Diversification Opportunities for Equinox Gold and Ivanhoe Electric
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equinox and Ivanhoe is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Equinox Gold i.e., Equinox Gold and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Equinox Gold and Ivanhoe Electric
Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 1.06 times more return on investment than Ivanhoe Electric. However, Equinox Gold is 1.06 times more volatile than Ivanhoe Electric. It trades about -0.01 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.22 per unit of risk. If you would invest 544.00 in Equinox Gold Corp on September 18, 2024 and sell it today you would lose (12.00) from holding Equinox Gold Corp or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Ivanhoe Electric
Performance |
| Timeline |
| Equinox Gold Corp |
| Ivanhoe Electric |
Equinox Gold and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Ivanhoe Electric
The main advantage of trading using opposite Equinox Gold and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Ivanhoe Electric 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 Ivanhoe Electric will offset losses from the drop in Ivanhoe Electric'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 |
| Ivanhoe Electric vs. Olympic Steel | Ivanhoe Electric vs. Steel Dynamics | Ivanhoe Electric vs. Commercial Metals | Ivanhoe Electric vs. Nucor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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