Correlation Between NACCO Industries and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both NACCO Industries 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 NACCO Industries and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and Barrick Gold Corp, you can compare the effects of market volatilities on NACCO Industries 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 NACCO Industries with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and Barrick Gold.
Diversification Opportunities for NACCO Industries and Barrick Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NACCO and Barrick is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries 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 NACCO Industries 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 NACCO Industries 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 NACCO Industries i.e., NACCO Industries and Barrick Gold go up and down completely randomly.
Pair Corralation between NACCO Industries and Barrick Gold
Allowing for the 90-day total investment horizon NACCO Industries is expected to generate 1.76 times more return on investment than Barrick Gold. However, NACCO Industries is 1.76 times more volatile than Barrick Gold Corp. It trades about 0.19 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.33 per unit of risk. If you would invest 2,780 in NACCO Industries on August 23, 2024 and sell it today you would earn a total of 427.00 from holding NACCO Industries or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. Barrick Gold Corp
Performance |
| Timeline |
| NACCO Industries |
| Barrick Gold Corp |
NACCO Industries and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and Barrick Gold
The main advantage of trading using opposite NACCO Industries and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries 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.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Consol Energy | NACCO Industries vs. Indo Tambangraya Megah |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Kinross Gold | Barrick Gold vs. B2Gold Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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