Correlation Between NioCorp Developments and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Barrick Gold Corp, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Barrick Gold.
Diversification Opportunities for NioCorp Developments and Barrick Gold
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NioCorp and Barrick is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd 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 NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Barrick Gold go up and down completely randomly.
Pair Corralation between NioCorp Developments and Barrick Gold
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Barrick Gold. In addition to that, NioCorp Developments is 1.84 times more volatile than Barrick Gold Corp. It trades about -0.4 of its total potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.21 per unit of volatility. If you would invest 1,998 in Barrick Gold Corp on August 27, 2024 and sell it today you would lose (176.00) from holding Barrick Gold Corp or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Barrick Gold Corp
Performance |
| Timeline |
| NioCorp Developments |
| Barrick Gold Corp |
NioCorp Developments and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Barrick Gold
The main advantage of trading using opposite NioCorp Developments and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Vale SA ADR | NioCorp Developments vs. Teck Resources Ltd | NioCorp Developments vs. BHP Group Limited | NioCorp Developments vs. Glencore PLC ADR |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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