Correlation Between Barrick Gold and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Emerson Radio 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 Emerson Radio 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 Emerson Radio, you can compare the effects of market volatilities on Barrick Gold and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Emerson Radio.
Diversification Opportunities for Barrick Gold and Emerson Radio
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrick and Emerson is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of Barrick Gold i.e., Barrick Gold and Emerson Radio go up and down completely randomly.
Pair Corralation between Barrick Gold and Emerson Radio
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.7 times more return on investment than Emerson Radio. However, Barrick Gold Corp is 1.44 times less risky than Emerson Radio. It trades about 0.03 of its potential returns per unit of risk. Emerson Radio is currently generating about -0.02 per unit of risk. If you would invest 1,542 in Barrick Gold Corp on September 14, 2024 and sell it today you would earn a total of 136.00 from holding Barrick Gold Corp or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Emerson Radio
Performance |
| Timeline |
| Barrick Gold Corp |
| Emerson Radio |
Barrick Gold and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Emerson Radio
The main advantage of trading using opposite Barrick Gold and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| Barrick Gold vs. Fortitude Gold Corp | Barrick Gold vs. New Gold | Barrick Gold vs. Galiano Gold | Barrick Gold vs. GoldMining |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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