Correlation Between Equinox Gold and Paramount Gold
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Paramount 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 Paramount 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 Paramount Gold Nevada, you can compare the effects of market volatilities on Equinox Gold and Paramount 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 Paramount Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Paramount Gold.
Diversification Opportunities for Equinox Gold and Paramount Gold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Equinox and Paramount is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Paramount Gold Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Gold Nevada 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 Paramount Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Gold Nevada has no effect on the direction of Equinox Gold i.e., Equinox Gold and Paramount Gold go up and down completely randomly.
Pair Corralation between Equinox Gold and Paramount Gold
Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 0.75 times more return on investment than Paramount Gold. However, Equinox Gold Corp is 1.33 times less risky than Paramount Gold. It trades about 0.06 of its potential returns per unit of risk. Paramount Gold Nevada is currently generating about 0.03 per unit of risk. If you would invest 436.00 in Equinox Gold Corp on November 3, 2024 and sell it today you would earn a total of 171.00 from holding Equinox Gold Corp or generate 39.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Equinox Gold Corp vs. Paramount Gold Nevada
Performance |
| Timeline |
| Equinox Gold Corp |
| Paramount Gold Nevada |
Equinox Gold and Paramount Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Paramount Gold
The main advantage of trading using opposite Equinox Gold and Paramount Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Paramount 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 Paramount Gold will offset losses from the drop in Paramount 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 |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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