Correlation Between Wheaton Precious and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Barrick Gold Corp, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Barrick Gold.
Diversification Opportunities for Wheaton Precious and Barrick Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wheaton and Barrick is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Barrick Gold go up and down completely randomly.
Pair Corralation between Wheaton Precious and Barrick Gold
Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 0.93 times more return on investment than Barrick Gold. However, Wheaton Precious Metals is 1.08 times less risky than Barrick Gold. It trades about 0.07 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 3,796 in Wheaton Precious Metals on August 24, 2024 and sell it today you would earn a total of 2,552 from holding Wheaton Precious Metals or generate 67.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Barrick Gold Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Barrick Gold Corp |
Wheaton Precious and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Barrick Gold
The main advantage of trading using opposite Wheaton Precious and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Royal Gold | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Osisko Gold Ro |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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