Correlation Between Equinox Gold and Filo Mining

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

Diversification Opportunities for Equinox Gold and Filo Mining

0.22

Correlation Coefficient

Equinox Gold  Filo Mining

Modest diversification

The 3 months correlation between Equinox and Filo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining Corp 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 Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Equinox Gold i.e., Equinox Gold and Filo Mining go up and down completely randomly.

Pair Corralation between Equinox Gold and Filo Mining

Assuming the 90 days trading horizon Equinox Gold is expected to generate 2.4 times less return on investment than Filo Mining. In addition to that, Equinox Gold is 2.04 times more volatile than Filo Mining Corp. It trades about 0.03 of its total potential returns per unit of risk. Filo Mining Corp is currently generating about 0.14 per unit of volatility. If you would invest  2,452  in Filo Mining Corp on September 23, 2024 and sell it today you would earn a total of  717.00  from holding Filo Mining Corp or generate 29.24% return on investment over 90 days.

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

Equinox Gold Corp  vs.  Filo Mining Corp

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 latest stock price disarray, may contribute to short-term losses for the investors.

Filo Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Equinox Gold and Filo Mining

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

The idea behind Equinox Gold Corp and Filo Mining 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.