Correlation Between Barrick Gold and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Custom Truck 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 Custom Truck 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 Custom Truck One, you can compare the effects of market volatilities on Barrick Gold and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Custom Truck.
Diversification Opportunities for Barrick Gold and Custom Truck
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrick and Custom is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Barrick Gold i.e., Barrick Gold and Custom Truck go up and down completely randomly.
Pair Corralation between Barrick Gold and Custom Truck
Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Custom Truck. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.94 times less risky than Custom Truck. The stock trades about -0.29 of its potential returns per unit of risk. The Custom Truck One is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 397.00 in Custom Truck One on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Custom Truck One or generate 51.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Custom Truck One
Performance |
| Timeline |
| Barrick Gold Corp |
| Custom Truck One |
Barrick Gold and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Custom Truck
The main advantage of trading using opposite Barrick Gold and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck'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 |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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