Correlation Between Equinox Gold and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Equinox Gold and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Wheaton Precious.
Diversification Opportunities for Equinox Gold and Wheaton Precious
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equinox and Wheaton is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Equinox Gold i.e., Equinox Gold and Wheaton Precious go up and down completely randomly.
Pair Corralation between Equinox Gold and Wheaton Precious
Considering the 90-day investment horizon Equinox Gold Corp is expected to generate 1.59 times more return on investment than Wheaton Precious. However, Equinox Gold is 1.59 times more volatile than Wheaton Precious Metals. It trades about -0.02 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.15 per unit of risk. If you would invest 580.00 in Equinox Gold Corp on August 31, 2024 and sell it today you would lose (20.00) from holding Equinox Gold Corp or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Wheaton Precious Metals
Performance |
| Timeline |
| Equinox Gold Corp |
| Wheaton Precious Metals |
Equinox Gold and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Wheaton Precious
The main advantage of trading using opposite Equinox Gold and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| Equinox Gold vs. Coeur Mining | Equinox Gold vs. B2Gold Corp | Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver |
| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Alamos Gold | Wheaton Precious vs. Seabridge Gold | Wheaton Precious vs. Osisko Gold Ro |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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