Correlation Between Barrick Gold and Marimaca Copper

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Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Marimaca Copper 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 Marimaca Copper 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 Marimaca Copper Corp, you can compare the effects of market volatilities on Barrick Gold and Marimaca Copper 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 Marimaca Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Marimaca Copper.

Diversification Opportunities for Barrick Gold and Marimaca Copper

BarrickMarimacaDiversified AwayBarrickMarimacaDiversified Away100%
0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Barrick and Marimaca is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper 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 Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and Marimaca Copper go up and down completely randomly.

Pair Corralation between Barrick Gold and Marimaca Copper

Given the investment horizon of 90 days Barrick Gold is expected to generate 2.71 times less return on investment than Marimaca Copper. But when comparing it to its historical volatility, Barrick Gold Corp is 1.72 times less risky than Marimaca Copper. It trades about 0.05 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  343.00  in Marimaca Copper Corp on November 26, 2024 and sell it today you would earn a total of  45.00  from holding Marimaca Copper Corp or generate 13.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.33%
ValuesDaily Returns

Barrick Gold Corp  vs.  Marimaca Copper Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15GOLD MARIF
       Timeline  
Barrick Gold Corp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Gold Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Barrick Gold is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15.51616.51717.51818.519
Marimaca Copper Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Marimaca Copper reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.13.23.33.43.53.63.73.83.9

Barrick Gold and Marimaca Copper Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.11-4.58-3.04-1.510.01.543.144.736.327.92 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15GOLD MARIF
       Returns  

Pair Trading with Barrick Gold and Marimaca Copper

The main advantage of trading using opposite Barrick Gold and Marimaca Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Marimaca Copper 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 Marimaca Copper will offset losses from the drop in Marimaca Copper's long position.
The idea behind Barrick Gold Corp and Marimaca Copper Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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