Correlation Between Barrick Gold and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Electronic Arts 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 Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on Barrick Gold and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Electronic Arts.
Diversification Opportunities for Barrick Gold and Electronic Arts
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrick and Electronic is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Barrick Gold i.e., Barrick Gold and Electronic Arts go up and down completely randomly.
Pair Corralation between Barrick Gold and Electronic Arts
Given the investment horizon of 90 days Barrick Gold is expected to generate 1.24 times less return on investment than Electronic Arts. In addition to that, Barrick Gold is 1.64 times more volatile than Electronic Arts. It trades about 0.02 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.05 per unit of volatility. If you would invest 12,909 in Electronic Arts on August 26, 2024 and sell it today you would earn a total of 3,758 from holding Electronic Arts or generate 29.11% 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. Electronic Arts
Performance |
| Timeline |
| Barrick Gold Corp |
| Electronic Arts |
Barrick Gold and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Electronic Arts
The main advantage of trading using opposite Barrick Gold and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' 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 |
| Electronic Arts vs. Playstudios | Electronic Arts vs. Talkspace | Electronic Arts vs. Katapult Holdings Equity | Electronic Arts vs. Aquagold International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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