Correlation Between Barrick Gold and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Boston Properties 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 Boston Properties 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 Boston Properties, you can compare the effects of market volatilities on Barrick Gold and Boston Properties 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 Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Boston Properties.
Diversification Opportunities for Barrick Gold and Boston Properties
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barrick and Boston is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties 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 Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of Barrick Gold i.e., Barrick Gold and Boston Properties go up and down completely randomly.
Pair Corralation between Barrick Gold and Boston Properties
Given the investment horizon of 90 days Barrick Gold is expected to generate 3.27 times less return on investment than Boston Properties. But when comparing it to its historical volatility, Barrick Gold Corp is 1.2 times less risky than Boston Properties. It trades about 0.01 of its potential returns per unit of risk. Boston Properties is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,017 in Boston Properties on September 12, 2024 and sell it today you would earn a total of 1,972 from holding Boston Properties or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Boston Properties
Performance |
| Timeline |
| Barrick Gold Corp |
| Boston Properties |
Barrick Gold and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Boston Properties
The main advantage of trading using opposite Barrick Gold and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Boston Properties 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 Boston Properties will offset losses from the drop in Boston Properties' 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 |
| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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