Correlation Between Barrick Gold and Simpson Manufacturing
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Simpson Manufacturing 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 Simpson Manufacturing 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 Simpson Manufacturing, you can compare the effects of market volatilities on Barrick Gold and Simpson Manufacturing 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 Simpson Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Simpson Manufacturing.
Diversification Opportunities for Barrick Gold and Simpson Manufacturing
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barrick and Simpson is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Simpson Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simpson Manufacturing 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 Simpson Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simpson Manufacturing has no effect on the direction of Barrick Gold i.e., Barrick Gold and Simpson Manufacturing go up and down completely randomly.
Pair Corralation between Barrick Gold and Simpson Manufacturing
Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Simpson Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.1 times less risky than Simpson Manufacturing. The stock trades about -0.22 of its potential returns per unit of risk. The Simpson Manufacturing is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17,979 in Simpson Manufacturing on September 1, 2024 and sell it today you would earn a total of 861.00 from holding Simpson Manufacturing or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Simpson Manufacturing
Performance |
| Timeline |
| Barrick Gold Corp |
| Simpson Manufacturing |
Barrick Gold and Simpson Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Simpson Manufacturing
The main advantage of trading using opposite Barrick Gold and Simpson Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Simpson Manufacturing 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 Simpson Manufacturing will offset losses from the drop in Simpson Manufacturing'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 |
| Simpson Manufacturing vs. West Fraser Timber | Simpson Manufacturing vs. Interfor | Simpson Manufacturing vs. Ufp Industries | Simpson Manufacturing vs. Canfor |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |