Correlation Between Robex Resources and Equinox Gold

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

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

Diversification Opportunities for Robex Resources and Equinox Gold

0.3

Correlation Coefficient

Robex Resources  Equinox Gold

Weak diversification

The 3 months correlation between Robex and Equinox is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Robex 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 Robex Resources 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 Robex 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 Robex Resources i.e., Robex Resources and Equinox Gold go up and down completely randomly.

Pair Corralation between Robex Resources and Equinox Gold

Assuming the 90 days horizon Robex Resources is expected to generate 2.66 times less return on investment than Equinox Gold. But when comparing it to its historical volatility, Robex Resources is 1.03 times less risky than Equinox Gold. It trades about 0.07 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  497.00  in Equinox Gold Corp on December 28, 2024 and sell it today you would earn a total of  190.00  from holding Equinox Gold Corp or generate 38.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Robex Resources  vs.  Equinox Gold Corp

Robex Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Robex Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Robex Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Equinox Gold Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equinox Gold Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Equinox Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robex Resources and Equinox Gold

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

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .