Correlation Between Barrick Gold and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Delek Logistics 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 Delek Logistics 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 Delek Logistics Partners, you can compare the effects of market volatilities on Barrick Gold and Delek Logistics 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 Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Delek Logistics.
Diversification Opportunities for Barrick Gold and Delek Logistics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barrick and Delek is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Barrick Gold i.e., Barrick Gold and Delek Logistics go up and down completely randomly.
Pair Corralation between Barrick Gold and Delek Logistics
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 1.27 times more return on investment than Delek Logistics. However, Barrick Gold is 1.27 times more volatile than Delek Logistics Partners. It trades about 0.02 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about -0.02 per unit of risk. If you would invest 1,692 in Barrick Gold Corp on September 2, 2024 and sell it today you would earn a total of 57.00 from holding Barrick Gold Corp or generate 3.37% 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. Delek Logistics Partners
Performance |
Timeline |
Barrick Gold Corp |
Delek Logistics Partners |
Barrick Gold and Delek Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barrick Gold and Delek Logistics
The main advantage of trading using opposite Barrick Gold and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Delek Logistics 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 Delek Logistics will offset losses from the drop in Delek Logistics' 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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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