Correlation Between Mount Gibson and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Mount Gibson and Equinox 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 Mount Gibson and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and Equinox Gold Corp, you can compare the effects of market volatilities on Mount Gibson and Equinox 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 Mount Gibson with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and Equinox Gold.
Diversification Opportunities for Mount Gibson and Equinox Gold
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mount and Equinox is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron and Equinox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Gold Corp and Mount Gibson 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 Mount Gibson Iron are associated (or correlated) with Equinox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Gold Corp has no effect on the direction of Mount Gibson i.e., Mount Gibson and Equinox Gold go up and down completely randomly.
Pair Corralation between Mount Gibson and Equinox Gold
Assuming the 90 days horizon Mount Gibson Iron is expected to generate 0.67 times more return on investment than Equinox Gold. However, Mount Gibson Iron is 1.49 times less risky than Equinox Gold. It trades about -0.24 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about -0.19 per unit of risk. If you would invest 19.00 in Mount Gibson Iron on October 11, 2024 and sell it today you would lose (2.00) from holding Mount Gibson Iron or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. Equinox Gold Corp
Performance |
| Timeline |
| Mount Gibson Iron |
| Equinox Gold Corp |
Mount Gibson and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and Equinox Gold
The main advantage of trading using opposite Mount Gibson and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson position performs unexpectedly, Equinox 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 Equinox Gold will offset losses from the drop in Equinox Gold's long position.| Mount Gibson vs. Nucor | Mount Gibson vs. Reliance Steel Aluminum | Mount Gibson vs. Superior Plus Corp | Mount Gibson vs. NMI Holdings |
| Equinox Gold vs. Reinsurance Group of | Equinox Gold vs. Lifeway Foods | Equinox Gold vs. National Beverage Corp | Equinox Gold vs. THAI BEVERAGE |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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