Correlation Between Air Transport and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Barrick Gold, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Barrick Gold.
Diversification Opportunities for Air Transport and Barrick Gold
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Barrick is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold and Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Barrick Gold go up and down completely randomly.
Pair Corralation between Air Transport and Barrick Gold
Assuming the 90 days horizon Air Transport Services is expected to generate 0.34 times more return on investment than Barrick Gold. However, Air Transport Services is 2.99 times less risky than Barrick Gold. It trades about 0.1 of its potential returns per unit of risk. Barrick Gold is currently generating about -0.04 per unit of risk. If you would invest 2,100 in Air Transport Services on November 1, 2024 and sell it today you would earn a total of 20.00 from holding Air Transport Services or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Barrick Gold
Performance |
| Timeline |
| Air Transport Services |
| Barrick Gold |
Air Transport and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Barrick Gold
The main advantage of trading using opposite Air Transport and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Airports of Thailand | Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AENA SME UNSPADR110 |
| Barrick Gold vs. ZIJIN MINH UNSPADR20 | Barrick Gold vs. Newmont | Barrick Gold vs. Superior Plus Corp | Barrick Gold vs. Origin Agritech |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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