Correlation Between Barrick Gold and Snowline Gold
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Snowline Gold 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 Snowline Gold 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 Snowline Gold Corp, you can compare the effects of market volatilities on Barrick Gold and Snowline Gold 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 Snowline Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Snowline Gold.
Diversification Opportunities for Barrick Gold and Snowline Gold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barrick and Snowline is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Snowline Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowline Gold 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 Snowline Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snowline Gold Corp has no effect on the direction of Barrick Gold i.e., Barrick Gold and Snowline Gold go up and down completely randomly.
Pair Corralation between Barrick Gold and Snowline Gold
Given the investment horizon of 90 days Barrick Gold is expected to generate 2.37 times less return on investment than Snowline Gold. But when comparing it to its historical volatility, Barrick Gold Corp is 1.5 times less risky than Snowline Gold. It trades about 0.11 of its potential returns per unit of risk. Snowline Gold Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Snowline Gold Corp on October 23, 2024 and sell it today you would earn a total of 20.00 from holding Snowline Gold Corp or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Barrick Gold Corp vs. Snowline Gold Corp
Performance |
| Timeline |
| Barrick Gold Corp |
| Snowline Gold Corp |
Barrick Gold and Snowline Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Snowline Gold
The main advantage of trading using opposite Barrick Gold and Snowline Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Snowline Gold 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 Snowline Gold will offset losses from the drop in Snowline Gold'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 |
| Snowline Gold vs. Heliostar Metals | Snowline Gold vs. Independence Gold Corp | Snowline Gold vs. Westward Gold | Snowline Gold vs. Cabral Gold |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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