Correlation Between Barrick Gold and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and PVH Corp 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 PVH Corp 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 PVH Corp, you can compare the effects of market volatilities on Barrick Gold and PVH Corp 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and PVH Corp.
Diversification Opportunities for Barrick Gold and PVH Corp
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrick and PVH is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and PVH Corp go up and down completely randomly.
Pair Corralation between Barrick Gold and PVH Corp
Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the PVH Corp. In addition to that, Barrick Gold is 1.19 times more volatile than PVH Corp. It trades about -0.14 of its total potential returns per unit of risk. PVH Corp is currently generating about -0.04 per unit of volatility. If you would invest 10,718 in PVH Corp on October 7, 2024 and sell it today you would lose (170.00) from holding PVH Corp or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. PVH Corp
Performance |
| Timeline |
| Barrick Gold Corp |
| PVH Corp |
Barrick Gold and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and PVH Corp
The main advantage of trading using opposite Barrick Gold and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp'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 |
| PVH Corp vs. VF Corporation | PVH Corp vs. Levi Strauss Co | PVH Corp vs. Under Armour A | PVH Corp vs. Columbia Sportswear |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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