Correlation Between Equinox Gold and Aya Gold

Can any of the company-specific risk be diversified away by investing in both Equinox Gold and Aya 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 Equinox Gold and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equinox Gold Corp and Aya Gold Silver, you can compare the effects of market volatilities on Equinox Gold and Aya 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 Equinox Gold with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Aya Gold.

Diversification Opportunities for Equinox Gold and Aya Gold

0.28

Correlation Coefficient

Equinox Gold  Aya Gold

Modest diversification

The 3 months correlation between Equinox and Aya is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Equinox 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 Equinox Gold Corp are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Equinox Gold i.e., Equinox Gold and Aya Gold go up and down completely randomly.

Pair Corralation between Equinox Gold and Aya Gold

Assuming the 90 days trading horizon Equinox Gold Corp is expected to generate 1.36 times more return on investment than Aya Gold. However, Equinox Gold is 1.36 times more volatile than Aya Gold Silver. It trades about -0.11 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.32 per unit of risk. If you would invest  825.00  in Equinox Gold Corp on October 6, 2024 and sell it today you would lose (72.00) from holding Equinox Gold Corp or give up 8.73% of portfolio value over 90 days.

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

Equinox Gold Corp  vs.  Aya Gold Silver

Equinox Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equinox Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Equinox Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Equinox Gold and Aya Gold

The main advantage of trading using opposite Equinox Gold and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox Gold position performs unexpectedly, Aya 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 Aya Gold will offset losses from the drop in Aya Gold's long position.

The idea behind Equinox Gold Corp and Aya Gold Silver 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.