Correlation Between Barrick Gold and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and ASE Industrial 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 ASE Industrial 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 ASE Industrial Holding, you can compare the effects of market volatilities on Barrick Gold and ASE Industrial 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 ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and ASE Industrial.
Diversification Opportunities for Barrick Gold and ASE Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barrick and ASE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding 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 ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of Barrick Gold i.e., Barrick Gold and ASE Industrial go up and down completely randomly.
Pair Corralation between Barrick Gold and ASE Industrial
Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the ASE Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.09 times less risky than ASE Industrial. The stock trades about -0.09 of its potential returns per unit of risk. The ASE Industrial Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 911.00 in ASE Industrial Holding on September 3, 2024 and sell it today you would earn a total of 61.00 from holding ASE Industrial Holding or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. ASE Industrial Holding
Performance |
| Timeline |
| Barrick Gold Corp |
| ASE Industrial Holding |
Barrick Gold and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and ASE Industrial
The main advantage of trading using opposite Barrick Gold and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, ASE Industrial 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 ASE Industrial will offset losses from the drop in ASE Industrial's long position.| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Kinross Gold | Barrick Gold vs. Gold Fields Ltd | Barrick Gold vs. Franco Nevada |
| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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