Correlation Between Barrick Gold and Seadrill
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Seadrill 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 Seadrill 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 Seadrill Limited, you can compare the effects of market volatilities on Barrick Gold and Seadrill 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 Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Seadrill.
Diversification Opportunities for Barrick Gold and Seadrill
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barrick and Seadrill is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited 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 Seadrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seadrill Limited has no effect on the direction of Barrick Gold i.e., Barrick Gold and Seadrill go up and down completely randomly.
Pair Corralation between Barrick Gold and Seadrill
Given the investment horizon of 90 days Barrick Gold is expected to generate 3.17 times less return on investment than Seadrill. But when comparing it to its historical volatility, Barrick Gold Corp is 1.23 times less risky than Seadrill. It trades about 0.01 of its potential returns per unit of risk. Seadrill Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,984 in Seadrill Limited on September 12, 2024 and sell it today you would earn a total of 892.00 from holding Seadrill Limited or generate 29.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Seadrill Limited
Performance |
| Timeline |
| Barrick Gold Corp |
| Seadrill Limited |
Barrick Gold and Seadrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Seadrill
The main advantage of trading using opposite Barrick Gold and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Seadrill 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 Seadrill will offset losses from the drop in Seadrill'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 |
| Seadrill vs. Nabors Industries | Seadrill vs. Borr Drilling | Seadrill vs. Transocean | Seadrill vs. Helmerich and Payne |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |