Correlation Between Barrick Gold and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and AAC TECHNOLOGHLDGADR 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 Barrick Gold and AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrick Gold and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Barrick Gold and AAC TECHNOLOGHLDGADR 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 Barrick Gold with a short position of AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Barrick Gold and AAC TECHNOLOGHLDGADR
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrick and AAC is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Barrick 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 Barrick Gold are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Barrick Gold i.e., Barrick Gold and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Barrick Gold and AAC TECHNOLOGHLDGADR
Assuming the 90 days horizon Barrick Gold is expected to generate 7.04 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Barrick Gold is 1.72 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.08 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 360.00 in AAC TECHNOLOGHLDGADR on September 13, 2024 and sell it today you would earn a total of 100.00 from holding AAC TECHNOLOGHLDGADR or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Barrick Gold |
| AAC TECHNOLOGHLDGADR |
Barrick Gold and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Barrick Gold and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Barrick Gold vs. Benchmark Electronics | Barrick Gold vs. Chesapeake Utilities | Barrick Gold vs. BJs Restaurants | Barrick Gold vs. LPKF Laser Electronics |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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