Correlation Between Equinox Gold and Lifezone Metals
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Lifezone 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 Lifezone 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 Lifezone Metals Limited, you can compare the effects of market volatilities on Equinox Gold and Lifezone 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 Lifezone Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Lifezone Metals.
Diversification Opportunities for Equinox Gold and Lifezone Metals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinox and Lifezone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Lifezone Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifezone 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 Lifezone Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifezone Metals has no effect on the direction of Equinox Gold i.e., Equinox Gold and Lifezone Metals go up and down completely randomly.
Pair Corralation between Equinox Gold and Lifezone Metals
Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 3.02 times more return on investment than Lifezone Metals. However, Equinox Gold is 3.02 times more volatile than Lifezone Metals Limited. It trades about 0.29 of its potential returns per unit of risk. Lifezone Metals Limited is currently generating about -0.78 per unit of risk. If you would invest 509.00 in Equinox Gold Corp on November 7, 2024 and sell it today you would earn a total of 98.00 from holding Equinox Gold Corp or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Lifezone Metals Limited
Performance |
| Timeline |
| Equinox Gold Corp |
| Lifezone Metals |
Equinox Gold and Lifezone Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Lifezone Metals
The main advantage of trading using opposite Equinox Gold and Lifezone Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Lifezone 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 Lifezone Metals will offset losses from the drop in Lifezone Metals' long position.| Equinox Gold vs. Agnico Eagle Mines | Equinox Gold vs. Pan American Silver | Equinox Gold vs. Wheaton Precious Metals | Equinox Gold vs. Kinross Gold |
| Lifezone Metals vs. Cardinal Health | Lifezone Metals vs. RadNet Inc | Lifezone Metals vs. Regeneron Pharmaceuticals | Lifezone Metals vs. Aperture Health |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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