Correlation Between Barrick Gold and NetMed
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and NetMed 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 NetMed 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 NetMed Inc, you can compare the effects of market volatilities on Barrick Gold and NetMed 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 NetMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and NetMed.
Diversification Opportunities for Barrick Gold and NetMed
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barrick and NetMed is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and NetMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetMed Inc 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 NetMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetMed Inc has no effect on the direction of Barrick Gold i.e., Barrick Gold and NetMed go up and down completely randomly.
Pair Corralation between Barrick Gold and NetMed
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.11 times more return on investment than NetMed. However, Barrick Gold Corp is 9.1 times less risky than NetMed. It trades about 0.01 of its potential returns per unit of risk. NetMed Inc is currently generating about -0.18 per unit of risk. If you would invest 1,704 in Barrick Gold Corp on September 14, 2024 and sell it today you would lose (22.00) from holding Barrick Gold Corp or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.26% |
| Values | Daily Returns |
Barrick Gold Corp vs. NetMed Inc
Performance |
| Timeline |
| Barrick Gold Corp |
| NetMed Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Barrick Gold and NetMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and NetMed
The main advantage of trading using opposite Barrick Gold and NetMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, NetMed 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 NetMed will offset losses from the drop in NetMed's long position.| Barrick Gold vs. Fortitude Gold Corp | Barrick Gold vs. New Gold | Barrick Gold vs. Galiano Gold | Barrick Gold vs. GoldMining |
| NetMed vs. Perseus Mining Limited | NetMed vs. Barrick Gold Corp | NetMed vs. Micron Technology | NetMed vs. MACOM Technology Solutions |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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