Correlation Between Barrick Gold and Allianz SE
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Allianz SE 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 Allianz SE 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 Allianz SE, you can compare the effects of market volatilities on Barrick Gold and Allianz SE 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 Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Allianz SE.
Diversification Opportunities for Barrick Gold and Allianz SE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barrick and Allianz is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE 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 Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE has no effect on the direction of Barrick Gold i.e., Barrick Gold and Allianz SE go up and down completely randomly.
Pair Corralation between Barrick Gold and Allianz SE
Given the investment horizon of 90 days Barrick Gold is expected to generate 2.27 times less return on investment than Allianz SE. But when comparing it to its historical volatility, Barrick Gold Corp is 1.04 times less risky than Allianz SE. It trades about 0.14 of its potential returns per unit of risk. Allianz SE is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 34,225 in Allianz SE on December 16, 2024 and sell it today you would earn a total of 4,375 from holding Allianz SE or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Allianz SE
Performance |
| Timeline |
| Barrick Gold Corp |
| Allianz SE |
Barrick Gold and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Allianz SE
The main advantage of trading using opposite Barrick Gold and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Allianz SE 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 Allianz SE will offset losses from the drop in Allianz SE's long position.| Barrick Gold vs. Constellium Nv | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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