Correlation Between ASML Holding and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both ASML Holding 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 ASML Holding and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and Barrick Gold, you can compare the effects of market volatilities on ASML Holding 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 ASML Holding with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Barrick Gold.
Diversification Opportunities for ASML Holding and Barrick Gold
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Barrick is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold and ASML Holding 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 ASML Holding NV 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 has no effect on the direction of ASML Holding i.e., ASML Holding and Barrick Gold go up and down completely randomly.
Pair Corralation between ASML Holding and Barrick Gold
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 1.23 times more return on investment than Barrick Gold. However, ASML Holding is 1.23 times more volatile than Barrick Gold. It trades about 0.03 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.02 per unit of risk. If you would invest 59,818 in ASML Holding NV on November 9, 2024 and sell it today you would earn a total of 10,762 from holding ASML Holding NV or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Barrick Gold
Performance |
| Timeline |
| ASML Holding NV |
| Barrick Gold |
ASML Holding and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Barrick Gold
The main advantage of trading using opposite ASML Holding and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding 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.| ASML Holding vs. Zijin Mining Group | ASML Holding vs. GRIFFIN MINING LTD | ASML Holding vs. ALBIS LEASING AG | ASML Holding vs. De Grey Mining |
| Barrick Gold vs. X FAB Silicon Foundries | Barrick Gold vs. Silicon Motion Technology | Barrick Gold vs. CANON MARKETING JP | Barrick Gold vs. Tradegate AG Wertpapierhandelsbank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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