Correlation Between Barrick Gold and Homerun Resources
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Homerun Resources 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 Homerun Resources 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 Homerun Resources, you can compare the effects of market volatilities on Barrick Gold and Homerun Resources 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 Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Homerun Resources.
Diversification Opportunities for Barrick Gold and Homerun Resources
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Homerun is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun Resources 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of Barrick Gold i.e., Barrick Gold and Homerun Resources go up and down completely randomly.
Pair Corralation between Barrick Gold and Homerun Resources
Assuming the 90 days trading horizon Barrick Gold Corp is expected to generate 0.36 times more return on investment than Homerun Resources. However, Barrick Gold Corp is 2.75 times less risky than Homerun Resources. It trades about 0.22 of its potential returns per unit of risk. Homerun Resources is currently generating about -0.14 per unit of risk. If you would invest 2,223 in Barrick Gold Corp on November 6, 2024 and sell it today you would earn a total of 153.00 from holding Barrick Gold Corp or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Homerun Resources
Performance |
| Timeline |
| Barrick Gold Corp |
| Homerun Resources |
Barrick Gold and Homerun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Homerun Resources
The main advantage of trading using opposite Barrick Gold and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Homerun Resources 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 Homerun Resources will offset losses from the drop in Homerun Resources' 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 |
| Homerun Resources vs. Newmont Goldcorp Corp | Homerun Resources vs. Agnico Eagle Mines | Homerun Resources vs. Barrick Gold Corp | Homerun Resources vs. Wheaton Precious Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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