Correlation Between Hooker Furniture and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Barrick 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 Hooker Furniture and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Barrick Gold Corp, you can compare the effects of market volatilities on Hooker Furniture and Barrick 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 Hooker Furniture with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Barrick Gold.
Diversification Opportunities for Hooker Furniture and Barrick Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hooker and Barrick is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp and Hooker Furniture 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 Hooker Furniture are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Barrick Gold go up and down completely randomly.
Pair Corralation between Hooker Furniture and Barrick Gold
Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.42 times more return on investment than Barrick Gold. However, Hooker Furniture is 1.42 times more volatile than Barrick Gold Corp. It trades about 0.03 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 1,587 in Hooker Furniture on August 31, 2024 and sell it today you would earn a total of 286.00 from holding Hooker Furniture or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Barrick Gold Corp
Performance |
| Timeline |
| Hooker Furniture |
| Barrick Gold Corp |
Hooker Furniture and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Barrick Gold
The main advantage of trading using opposite Hooker Furniture and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Barrick 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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