Correlation Between Equinox Gold and Collective Mining

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

Diversification Opportunities for Equinox Gold and Collective Mining

-0.01

Correlation Coefficient

Equinox Gold  Collective Mining

Good diversification

The 3 months correlation between Equinox and Collective is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Equinox Gold i.e., Equinox Gold and Collective Mining go up and down completely randomly.

Pair Corralation between Equinox Gold and Collective Mining

Considering the 90-day investment horizon Equinox Gold is expected to generate 1.29 times less return on investment than Collective Mining. In addition to that, Equinox Gold is 1.39 times more volatile than Collective Mining. It trades about 0.18 of its total potential returns per unit of risk. Collective Mining is currently generating about 0.32 per unit of volatility. If you would invest  414.00  in Collective Mining on October 26, 2024 and sell it today you would earn a total of  64.00  from holding Collective Mining or generate 15.46% return on investment over 90 days.

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

Equinox Gold Corp  vs.  Collective Mining

Equinox Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equinox Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Equinox Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Collective Mining

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Collective Mining are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Collective Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equinox Gold and Collective Mining

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

The idea behind Equinox Gold Corp and Collective Mining 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.