Correlation Between Barrick Gold and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Alamos 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 Barrick Gold and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrick Gold Corp and Alamos Gold, you can compare the effects of market volatilities on Barrick Gold and Alamos 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 Barrick Gold with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Alamos Gold.
Diversification Opportunities for Barrick Gold and Alamos Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Alamos is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold 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 Corp are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Barrick Gold i.e., Barrick Gold and Alamos Gold go up and down completely randomly.
Pair Corralation between Barrick Gold and Alamos Gold
Assuming the 90 days trading horizon Barrick Gold Corp is expected to under-perform the Alamos Gold. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.11 times less risky than Alamos Gold. The stock trades about -0.28 of its potential returns per unit of risk. The Alamos Gold is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 2,915 in Alamos Gold on August 31, 2024 and sell it today you would lose (319.00) from holding Alamos Gold or give up 10.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Alamos Gold
Performance |
| Timeline |
| Barrick Gold Corp |
| Alamos Gold |
Barrick Gold and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Alamos Gold
The main advantage of trading using opposite Barrick Gold and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Barrick Gold vs. Kinross Gold Corp | Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Suncor Energy | Barrick Gold vs. Canadian Natural Resources |
| Alamos Gold vs. SPoT Coffee | Alamos Gold vs. Royal Bank of | Alamos Gold vs. Intact Financial Corp | Alamos Gold vs. Andlauer Healthcare Gr |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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