Correlation Between Torex Gold and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Torex 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 Torex 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 Torex Gold Resources and Equinox Gold Corp, you can compare the effects of market volatilities on Torex 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 Torex Gold with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torex Gold and Equinox Gold.
Diversification Opportunities for Torex Gold and Equinox Gold
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Torex and Equinox is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Torex Gold Resources 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 Torex 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 Torex Gold Resources 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 Torex Gold i.e., Torex Gold and Equinox Gold go up and down completely randomly.
Pair Corralation between Torex Gold and Equinox Gold
Assuming the 90 days horizon Torex Gold Resources is expected to generate 0.95 times more return on investment than Equinox Gold. However, Torex Gold Resources is 1.05 times less risky than Equinox Gold. It trades about 0.04 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 1,620 in Torex Gold Resources on November 27, 2024 and sell it today you would earn a total of 655.00 from holding Torex Gold Resources or generate 40.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Torex Gold Resources vs. Equinox Gold Corp
Performance |
| Timeline |
| Torex Gold Resources |
| Equinox Gold Corp |
Torex Gold and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Torex Gold and Equinox Gold
The main advantage of trading using opposite Torex Gold and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torex 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.| Torex Gold vs. Regeneron Pharmaceuticals | Torex Gold vs. Aldel Financial II | Torex Gold vs. Centessa Pharmaceuticals PLC | Torex Gold vs. Genfit |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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