Correlation Between Barrick Gold and Alternative Investment
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Alternative Investment 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 Alternative Investment 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 Alternative Investment, you can compare the effects of market volatilities on Barrick Gold and Alternative Investment 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 Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Alternative Investment.
Diversification Opportunities for Barrick Gold and Alternative Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrick and Alternative is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Alternative Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment 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 Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of Barrick Gold i.e., Barrick Gold and Alternative Investment go up and down completely randomly.
Pair Corralation between Barrick Gold and Alternative Investment
Given the investment horizon of 90 days Barrick Gold is expected to generate 173.01 times less return on investment than Alternative Investment. But when comparing it to its historical volatility, Barrick Gold Corp is 23.32 times less risky than Alternative Investment. It trades about 0.01 of its potential returns per unit of risk. Alternative Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Alternative Investment on November 2, 2024 and sell it today you would earn a total of 187.99 from holding Alternative Investment or generate 1879900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Barrick Gold Corp vs. Alternative Investment
Performance |
| Timeline |
| Barrick Gold Corp |
| Alternative Investment |
Barrick Gold and Alternative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Alternative Investment
The main advantage of trading using opposite Barrick Gold and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
| Alternative Investment vs. Brunswick | Alternative Investment vs. Todos Medical | Alternative Investment vs. Lucid Group | Alternative Investment vs. Gentex |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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