Correlation Between Barrick Gold and MFA Financial

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

Diversification Opportunities for Barrick Gold and MFA Financial

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Barrick and MFA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and MFA Financial SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFA Financial SR 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 MFA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFA Financial SR has no effect on the direction of Barrick Gold i.e., Barrick Gold and MFA Financial go up and down completely randomly.

Pair Corralation between Barrick Gold and MFA Financial

If you would invest  0.00  in MFA Financial SR on October 13, 2024 and sell it today you would earn a total of  0.00  from holding MFA Financial SR or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

Barrick Gold Corp  vs.  MFA Financial SR

 Performance 
       Timeline  
Barrick Gold Corp 

Risk-Adjusted Performance

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Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
MFA Financial SR 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days MFA Financial SR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, MFA Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Barrick Gold and MFA Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barrick Gold and MFA Financial

The main advantage of trading using opposite Barrick Gold and MFA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, MFA Financial 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 MFA Financial will offset losses from the drop in MFA Financial's long position.
The idea behind Barrick Gold Corp and MFA Financial SR 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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