Correlation Between Barrick Gold and Metalink
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Metalink 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 Metalink 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 Metalink, you can compare the effects of market volatilities on Barrick Gold and Metalink 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 Metalink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Metalink.
Diversification Opportunities for Barrick Gold and Metalink
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrick and Metalink is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Metalink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalink 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 Metalink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalink has no effect on the direction of Barrick Gold i.e., Barrick Gold and Metalink go up and down completely randomly.
Pair Corralation between Barrick Gold and Metalink
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 2.85 times more return on investment than Metalink. However, Barrick Gold is 2.85 times more volatile than Metalink. It trades about 0.04 of its potential returns per unit of risk. Metalink is currently generating about 0.11 per unit of risk. If you would invest 1,595 in Barrick Gold Corp on September 12, 2024 and sell it today you would earn a total of 125.00 from holding Barrick Gold Corp or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Metalink
Performance |
| Timeline |
| Barrick Gold Corp |
| Metalink |
Barrick Gold and Metalink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Metalink
The main advantage of trading using opposite Barrick Gold and Metalink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Metalink 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 Metalink will offset losses from the drop in Metalink's 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 |
| Metalink vs. Boston Properties | Metalink vs. GMS Inc | Metalink vs. Sea | Metalink vs. Sphere Entertainment Co |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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