Correlation Between Newmont Goldcorp and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp 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 Newmont Goldcorp and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Goldcorp Corp and Equinox Gold Corp, you can compare the effects of market volatilities on Newmont Goldcorp 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 Newmont Goldcorp with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Equinox Gold.
Diversification Opportunities for Newmont Goldcorp and Equinox Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmont and Equinox is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp 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 Newmont Goldcorp 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 Newmont Goldcorp Corp 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 Newmont Goldcorp i.e., Newmont Goldcorp and Equinox Gold go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Equinox Gold
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the Equinox Gold. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Goldcorp Corp is 1.88 times less risky than Equinox Gold. The stock trades about -0.29 of its potential returns per unit of risk. The Equinox Gold Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 571.00 in Equinox Gold Corp on August 28, 2024 and sell it today you would lose (17.00) from holding Equinox Gold Corp or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Equinox Gold Corp
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Equinox Gold Corp |
Newmont Goldcorp and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Equinox Gold
The main advantage of trading using opposite Newmont Goldcorp and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp 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.| Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Kinross Gold | Newmont Goldcorp vs. Wheaton Precious Metals |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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