Correlation Between Barrick Gold and Verde Clean
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Verde Clean 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 Verde Clean 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 Verde Clean Fuels, you can compare the effects of market volatilities on Barrick Gold and Verde Clean 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 Verde Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Verde Clean.
Diversification Opportunities for Barrick Gold and Verde Clean
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barrick and Verde is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Verde Clean Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verde Clean Fuels 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 Verde Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verde Clean Fuels has no effect on the direction of Barrick Gold i.e., Barrick Gold and Verde Clean go up and down completely randomly.
Pair Corralation between Barrick Gold and Verde Clean
Given the investment horizon of 90 days Barrick Gold Corp is expected to generate 0.46 times more return on investment than Verde Clean. However, Barrick Gold Corp is 2.18 times less risky than Verde Clean. It trades about 0.03 of its potential returns per unit of risk. Verde Clean Fuels is currently generating about 0.01 per unit of risk. If you would invest 1,649 in Barrick Gold Corp on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Barrick Gold Corp or generate 6.06% 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. Verde Clean Fuels
Performance |
| Timeline |
| Barrick Gold Corp |
| Verde Clean Fuels |
Barrick Gold and Verde Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Verde Clean
The main advantage of trading using opposite Barrick Gold and Verde Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Verde Clean 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 Verde Clean will offset losses from the drop in Verde Clean's long position.| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Gold Fields Ltd | Barrick Gold vs. Franco Nevada | Barrick Gold vs. Sandstorm Gold Ltd |
| Verde Clean vs. Brenmiller Energy Ltd | Verde Clean vs. Fusion Fuel Green | Verde Clean vs. Enlight Renewable Energy | Verde Clean vs. SCOR PK |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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