Correlation Between Royal Gold and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Royal Gold 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 Royal Gold and Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Gold and Equinox Gold Corp, you can compare the effects of market volatilities on Royal Gold 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 Royal Gold with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and Equinox Gold.
Diversification Opportunities for Royal Gold and Equinox Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and Equinox is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold 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 Royal Gold 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 Royal Gold 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 Royal Gold i.e., Royal Gold and Equinox Gold go up and down completely randomly.
Pair Corralation between Royal Gold and Equinox Gold
Given the investment horizon of 90 days Royal Gold is expected to generate 3.3 times less return on investment than Equinox Gold. But when comparing it to its historical volatility, Royal Gold is 1.97 times less risky than Equinox Gold. It trades about 0.03 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 357.00 in Equinox Gold Corp on November 9, 2024 and sell it today you would earn a total of 312.00 from holding Equinox Gold Corp or generate 87.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Gold vs. Equinox Gold Corp
Performance |
| Timeline |
| Royal Gold |
| Equinox Gold Corp |
Royal Gold and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Gold and Equinox Gold
The main advantage of trading using opposite Royal Gold and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Gold 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.| Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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