Correlation Between Barrick Gold and Copperbank Resources
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Copperbank Resources 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 Copperbank Resources 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 Copperbank Resources Corp, you can compare the effects of market volatilities on Barrick Gold and Copperbank Resources 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 Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Copperbank Resources.
Diversification Opportunities for Barrick Gold and Copperbank Resources
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Copperbank is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp 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 Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and Copperbank Resources go up and down completely randomly.
Pair Corralation between Barrick Gold and Copperbank Resources
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.63 times more return on investment than Copperbank Resources. However, Barrick Gold Corp is 1.59 times less risky than Copperbank Resources. It trades about -0.11 of its potential returns per unit of risk. Copperbank Resources Corp is currently generating about -0.15 per unit of risk. If you would invest 1,894 in Barrick Gold Corp on November 1, 2024 and sell it today you would lose (237.00) from holding Barrick Gold Corp or give up 12.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Barrick Gold Corp vs. Copperbank Resources Corp
Performance |
| Timeline |
| Barrick Gold Corp |
| Copperbank Resources Corp |
Barrick Gold and Copperbank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Copperbank Resources
The main advantage of trading using opposite Barrick Gold and Copperbank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Copperbank Resources 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 Copperbank Resources will offset losses from the drop in Copperbank Resources' 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 |
| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. Arizona Sonoran Copper | Copperbank Resources vs. CopperCorp Resources | Copperbank Resources vs. Copper Fox Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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