Correlation Between Calibre Mining and Equinox Gold

Can any of the company-specific risk be diversified away by investing in both Calibre 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 Calibre 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 Calibre Mining Corp and Equinox Gold Corp, you can compare the effects of market volatilities on Calibre 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 Calibre Mining with a short position of Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Equinox Gold.

Diversification Opportunities for Calibre Mining and Equinox Gold

0.68

Correlation Coefficient

Calibre Mining  Equinox Gold

Poor diversification

The 3 months correlation between Calibre and Equinox is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining 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 Calibre 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 Calibre Mining 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 Calibre Mining i.e., Calibre Mining and Equinox Gold go up and down completely randomly.

Pair Corralation between Calibre Mining and Equinox Gold

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 0.8 times more return on investment than Equinox Gold. However, Calibre Mining Corp is 1.25 times less risky than Equinox Gold. It trades about 0.08 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.06 per unit of risk. If you would invest  222.00  in Calibre Mining Corp on September 2, 2024 and sell it today you would earn a total of  28.00  from holding Calibre Mining Corp or generate 12.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Calibre Mining Corp  vs.  Equinox Gold Corp

Calibre Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Calibre Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Equinox Gold Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equinox Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Equinox Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Calibre Mining and Equinox Gold

The main advantage of trading using opposite Calibre Mining and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre 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 Calibre Mining Corp 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.