Correlation Between Boston Properties and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Boston Properties 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 Boston Properties and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Barrick Gold Corp, you can compare the effects of market volatilities on Boston Properties 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 Boston Properties with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Barrick Gold.
Diversification Opportunities for Boston Properties and Barrick Gold
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boston and Barrick is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties 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 Boston Properties 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 Boston Properties 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 Boston Properties i.e., Boston Properties and Barrick Gold go up and down completely randomly.
Pair Corralation between Boston Properties and Barrick Gold
Considering the 90-day investment horizon Boston Properties is expected to generate 1.2 times more return on investment than Barrick Gold. However, Boston Properties is 1.2 times more volatile than Barrick Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 6,017 in Boston Properties on September 12, 2024 and sell it today you would earn a total of 1,972 from holding Boston Properties or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Barrick Gold Corp
Performance |
| Timeline |
| Boston Properties |
| Barrick Gold Corp |
Boston Properties and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Barrick Gold
The main advantage of trading using opposite Boston Properties and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties 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.| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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