Correlation Between Barrick Gold and Angus Gold
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Angus 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 Barrick Gold and Angus Gold 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 Angus Gold, you can compare the effects of market volatilities on Barrick Gold and Angus 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 Barrick Gold with a short position of Angus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Angus Gold.
Diversification Opportunities for Barrick Gold and Angus Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Angus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Angus Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angus Gold 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 Angus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angus Gold has no effect on the direction of Barrick Gold i.e., Barrick Gold and Angus Gold go up and down completely randomly.
Pair Corralation between Barrick Gold and Angus Gold
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.22 times more return on investment than Angus Gold. However, Barrick Gold Corp is 4.52 times less risky than Angus Gold. It trades about -0.27 of its potential returns per unit of risk. Angus Gold is currently generating about -0.15 per unit of risk. If you would invest 1,998 in Barrick Gold Corp on August 29, 2024 and sell it today you would lose (237.00) from holding Barrick Gold Corp or give up 11.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Angus Gold
Performance |
| Timeline |
| Barrick Gold Corp |
| Angus Gold |
Barrick Gold and Angus Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Angus Gold
The main advantage of trading using opposite Barrick Gold and Angus Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Angus 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 Angus Gold will offset losses from the drop in Angus Gold's long position.The idea behind Barrick Gold Corp and Angus Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Angus Gold vs. Aurion Resources | Angus Gold vs. Liberty Gold Corp | Angus Gold vs. Orezone Gold Corp | Angus Gold vs. Fortuna Silver Mines |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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