Correlation Between NACCO Industries and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both NACCO Industries 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 NACCO Industries and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and Equinox Gold Corp, you can compare the effects of market volatilities on NACCO Industries 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 NACCO Industries with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and Equinox Gold.
Diversification Opportunities for NACCO Industries and Equinox Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NACCO and Equinox is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries 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 NACCO Industries 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 NACCO Industries 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 NACCO Industries i.e., NACCO Industries and Equinox Gold go up and down completely randomly.
Pair Corralation between NACCO Industries and Equinox Gold
Allowing for the 90-day total investment horizon NACCO Industries is expected to generate 6.56 times less return on investment than Equinox Gold. But when comparing it to its historical volatility, NACCO Industries is 2.94 times less risky than Equinox Gold. It trades about 0.12 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Equinox Gold Corp on November 18, 2024 and sell it today you would earn a total of 94.00 from holding Equinox Gold Corp or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. Equinox Gold Corp
Performance |
| Timeline |
| NACCO Industries |
| Equinox Gold Corp |
NACCO Industries and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and Equinox Gold
The main advantage of trading using opposite NACCO Industries and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries 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.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Indo Tambangraya Megah | NACCO Industries vs. Natural Resource Partners |
| Equinox Gold vs. Coeur Mining | Equinox Gold vs. B2Gold Corp | Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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