Correlation Between Orla Mining and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Orla Mining 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 Orla Mining and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orla Mining and Equinox Gold Corp, you can compare the effects of market volatilities on Orla Mining 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 Orla Mining with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orla Mining and Equinox Gold.
Diversification Opportunities for Orla Mining and Equinox Gold
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Orla and Equinox is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Orla Mining 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 Orla Mining 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 Orla Mining 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 Orla Mining i.e., Orla Mining and Equinox Gold go up and down completely randomly.
Pair Corralation between Orla Mining and Equinox Gold
Assuming the 90 days trading horizon Orla Mining is expected to under-perform the Equinox Gold. But the stock apears to be less risky and, when comparing its historical volatility, Orla Mining is 1.0 times less risky than Equinox Gold. The stock trades about -0.11 of its potential returns per unit of risk. The Equinox Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 813.00 in Equinox Gold Corp on August 25, 2024 and sell it today you would lose (13.00) from holding Equinox Gold Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orla Mining vs. Equinox Gold Corp
Performance |
| Timeline |
| Orla Mining |
| Equinox Gold Corp |
Orla Mining and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orla Mining and Equinox Gold
The main advantage of trading using opposite Orla Mining and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orla Mining 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 Orla Mining 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.| Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver | Equinox Gold vs. SSR Mining | Equinox Gold vs. SilverCrest Metals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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