Correlation Between Barrick Gold and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on Barrick Gold and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and SEI Investments.
Diversification Opportunities for Barrick Gold and SEI Investments
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrick and SEI is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Barrick Gold i.e., Barrick Gold and SEI Investments go up and down completely randomly.
Pair Corralation between Barrick Gold and SEI Investments
Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the SEI Investments. In addition to that, Barrick Gold is 1.56 times more volatile than SEI Investments. It trades about -0.31 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.28 per unit of volatility. If you would invest 7,620 in SEI Investments on August 30, 2024 and sell it today you would earn a total of 624.00 from holding SEI Investments or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. SEI Investments
Performance |
| Timeline |
| Barrick Gold Corp |
| SEI Investments |
Barrick Gold and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and SEI Investments
The main advantage of trading using opposite Barrick Gold and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' 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 |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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