Correlation Between Barrick Gold and Dayforce

Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Dayforce 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 Dayforce 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 Dayforce, you can compare the effects of market volatilities on Barrick Gold and Dayforce 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 Dayforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Dayforce.

Diversification Opportunities for Barrick Gold and Dayforce

-0.89

Correlation Coefficient

Barrick Gold  Dayforce

Pay attention - limited upside

The 3 months correlation between Barrick and Dayforce is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce 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 Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of Barrick Gold i.e., Barrick Gold and Dayforce go up and down completely randomly.

Pair Corralation between Barrick Gold and Dayforce

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Dayforce. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.05 times less risky than Dayforce. The stock trades about -0.16 of its potential returns per unit of risk. The Dayforce is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  5,899  in Dayforce on September 17, 2024 and sell it today you would earn a total of  1,818  from holding Dayforce or generate 30.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Barrick Gold Corp  vs.  Dayforce

Barrick Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dayforce

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Dayforce showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barrick Gold and Dayforce

The main advantage of trading using opposite Barrick Gold and Dayforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Dayforce 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 Dayforce will offset losses from the drop in Dayforce's long position.

The idea behind Barrick Gold Corp and Dayforce pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.