Correlation Between Idaho Strategic and Equinox Gold

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

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

Diversification Opportunities for Idaho Strategic and Equinox Gold

0.37

Correlation Coefficient

Idaho Strategic  Equinox Gold

Weak diversification

The 3 months correlation between Idaho and Equinox is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Idaho Strategic 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 Idaho Strategic 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 Idaho Strategic 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 Idaho Strategic i.e., Idaho Strategic and Equinox Gold go up and down completely randomly.

Pair Corralation between Idaho Strategic and Equinox Gold

Considering the 90-day investment horizon Idaho Strategic Resources is expected to generate 1.17 times more return on investment than Equinox Gold. However, Idaho Strategic is 1.17 times more volatile than Equinox Gold Corp. It trades about 0.08 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.02 per unit of risk. If you would invest  490.00  in Idaho Strategic Resources on August 24, 2024 and sell it today you would earn a total of  695.00  from holding Idaho Strategic Resources or generate 141.84% return on investment over 90 days.

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

Idaho Strategic Resources  vs.  Equinox Gold Corp

Idaho Strategic Resources

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Idaho Strategic Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental indicators, Idaho Strategic may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 fairly strong basic indicators, Equinox Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Idaho Strategic and Equinox Gold

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

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.