Correlation Between Alamos Gold and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Alamos Gold and Barrick 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 Alamos Gold and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamos Gold and Barrick Gold Corp, you can compare the effects of market volatilities on Alamos Gold and Barrick 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 Alamos Gold with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamos Gold and Barrick Gold.
Diversification Opportunities for Alamos Gold and Barrick Gold
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alamos and Barrick is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alamos Gold and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp and Alamos 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 Alamos Gold are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Alamos Gold i.e., Alamos Gold and Barrick Gold go up and down completely randomly.
Pair Corralation between Alamos Gold and Barrick Gold
Assuming the 90 days trading horizon Alamos Gold is expected to generate 1.3 times less return on investment than Barrick Gold. But when comparing it to its historical volatility, Alamos Gold is 1.1 times less risky than Barrick Gold. It trades about 0.19 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,424 in Barrick Gold Corp on December 9, 2024 and sell it today you would earn a total of 250.00 from holding Barrick Gold Corp or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamos Gold vs. Barrick Gold Corp
Performance |
| Timeline |
| Alamos Gold |
| Barrick Gold Corp |
Alamos Gold and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamos Gold and Barrick Gold
The main advantage of trading using opposite Alamos Gold and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamos Gold position performs unexpectedly, Barrick 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Alamos Gold vs. Calian Technologies | ||
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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