Correlation Between Ivanhoe Energy and Equinox Gold

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Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy 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 Ivanhoe Energy and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Equinox Gold Corp, you can compare the effects of market volatilities on Ivanhoe Energy 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 Ivanhoe Energy with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Equinox Gold.

Diversification Opportunities for Ivanhoe Energy and Equinox Gold

IvanhoeEquinoxDiversified AwayIvanhoeEquinoxDiversified Away100%
-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ivanhoe and Equinox is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy 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 Ivanhoe Energy 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 Ivanhoe Energy 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 Ivanhoe Energy i.e., Ivanhoe Energy and Equinox Gold go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Equinox Gold

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Equinox Gold. In addition to that, Ivanhoe Energy is 1.03 times more volatile than Equinox Gold Corp. It trades about -0.04 of its total potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.1 per unit of volatility. If you would invest  858.00  in Equinox Gold Corp on November 30, 2024 and sell it today you would earn a total of  52.00  from holding Equinox Gold Corp or generate 6.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ivanhoe Energy  vs.  Equinox Gold Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-1001020
JavaScript chart by amCharts 3.21.15IE EQX
       Timeline  
Ivanhoe Energy 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ivanhoe Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8910111213
Equinox Gold Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Equinox Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Equinox Gold displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.599.510

Ivanhoe Energy and Equinox Gold Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.33-4.74-3.15-1.560.01.312.643.975.3 0.0260.0270.0280.0290.0300.0310.032
JavaScript chart by amCharts 3.21.15IE EQX
       Returns  

Pair Trading with Ivanhoe Energy and Equinox Gold

The main advantage of trading using opposite Ivanhoe Energy and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy 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.
The idea behind Ivanhoe Energy and Equinox Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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