Correlation Between Barrick Gold and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Argo 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 Argo 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 Argo Gold, you can compare the effects of market volatilities on Barrick Gold and Argo 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 Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Argo Gold.
Diversification Opportunities for Barrick Gold and Argo Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Argo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo 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 Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Barrick Gold i.e., Barrick Gold and Argo Gold go up and down completely randomly.
Pair Corralation between Barrick Gold and Argo Gold
Given the investment horizon of 90 days Barrick Gold is expected to generate 1.77 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Barrick Gold Corp is 3.02 times less risky than Argo Gold. It trades about 0.02 of its potential returns per unit of risk. Argo Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Argo Gold on August 29, 2024 and sell it today you would lose (4.26) from holding Argo Gold or give up 42.6% 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. Argo Gold
Performance |
| Timeline |
| Barrick Gold Corp |
| Argo Gold |
Barrick Gold and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Argo Gold
The main advantage of trading using opposite Barrick Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Argo 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 Argo Gold will offset losses from the drop in Argo Gold'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 |
| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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