Correlation Between Barrick Gold and Distoken Acquisition

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

Diversification Opportunities for Barrick Gold and Distoken Acquisition

-0.86

Correlation Coefficient

Barrick Gold  Distoken Acquisition

Pay attention - limited upside

The 3 months correlation between Barrick and Distoken is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition 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 Distoken Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distoken Acquisition has no effect on the direction of Barrick Gold i.e., Barrick Gold and Distoken Acquisition go up and down completely randomly.

Pair Corralation between Barrick Gold and Distoken Acquisition

Given the investment horizon of 90 days Barrick Gold Corp is expected to under-perform the Distoken Acquisition. In addition to that, Barrick Gold is 2.37 times more volatile than Distoken Acquisition. It trades about -0.02 of its total potential returns per unit of risk. Distoken Acquisition is currently generating about 0.09 per unit of volatility. If you would invest  1,105  in Distoken Acquisition on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Distoken Acquisition or generate 1.36% 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.  Distoken Acquisition

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.

Distoken Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Distoken Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Barrick Gold and Distoken Acquisition

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

The idea behind Barrick Gold Corp and Distoken Acquisition 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.