Correlation Between Barrick Gold and Cameco Corp
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Cameco Corp 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 Cameco Corp 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 Cameco Corp, you can compare the effects of market volatilities on Barrick Gold and Cameco Corp 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 Cameco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Cameco Corp.
Diversification Opportunities for Barrick Gold and Cameco Corp
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barrick and Cameco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Cameco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameco Corp 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 Cameco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameco Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and Cameco Corp go up and down completely randomly.
Pair Corralation between Barrick Gold and Cameco Corp
Assuming the 90 days trading horizon Barrick Gold Corp is expected to under-perform the Cameco Corp. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.37 times less risky than Cameco Corp. The stock trades about -0.06 of its potential returns per unit of risk. The Cameco Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 5,134 in Cameco Corp on August 31, 2024 and sell it today you would earn a total of 3,092 from holding Cameco Corp or generate 60.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Cameco Corp
Performance |
| Timeline |
| Barrick Gold Corp |
| Cameco Corp |
Barrick Gold and Cameco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Cameco Corp
The main advantage of trading using opposite Barrick Gold and Cameco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Cameco Corp 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 Cameco Corp will offset losses from the drop in Cameco Corp'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 |
| Cameco Corp vs. Denison Mines Corp | Cameco Corp vs. Barrick Gold Corp | Cameco Corp vs. First Quantum Minerals | Cameco Corp vs. Kinross Gold Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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