Correlation Between Vista Gold and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Vista 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 Vista 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 Vista Gold and Equinox Gold Corp, you can compare the effects of market volatilities on Vista 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 Vista Gold with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Gold and Equinox Gold.
Diversification Opportunities for Vista Gold and Equinox Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vista and Equinox is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vista 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 Vista 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 Vista 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 Vista Gold i.e., Vista Gold and Equinox Gold go up and down completely randomly.
Pair Corralation between Vista Gold and Equinox Gold
Considering the 90-day investment horizon Vista Gold is expected to under-perform the Equinox Gold. But the stock apears to be less risky and, when comparing its historical volatility, Vista Gold is 1.08 times less risky than Equinox Gold. The stock trades about -0.19 of its potential returns per unit of risk. The Equinox Gold Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Equinox Gold Corp on August 24, 2024 and sell it today you would lose (30.00) from holding Equinox Gold Corp or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Gold vs. Equinox Gold Corp
Performance |
| Timeline |
| Vista Gold |
| Equinox Gold Corp |
Vista Gold and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Gold and Equinox Gold
The main advantage of trading using opposite Vista Gold and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista 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.| Vista Gold vs. International Tower Hill | Vista Gold vs. Harmony Gold Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. IAMGold |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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